What’s The Rules For Tax Deduction For Charitable Contribution In Nigeria?
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When preparing to file your federal tax return, don’t forget your contributions to charitable organizations. Your donations can add up to a nice tax deduction for your corporation (if you are a member of a flow-through business entity) or your personal taxes if you itemize deductions on FIRS Form.
Here are a few tips to help make sure your contributions pay off on your tax return:
In addition to the income tax exemption granted to NGOs, Section 25(3) of CITA provides that any company making donations to such an organization listed under the 5th schedule to CITA shall enjoy tax deductible donation not exceeding 10% of the total profits of that company for that year as ascertained before any deduction of such donations is made and must not be of capital nature. Goods purchased for use in humanitarian donor funded projects are zero rated under the Value Added Tax Act Cap V1 LFN 2004 as amended.
To be deductible, contributions must be made to qualified organizations.
NGOs includes organizations, institutions and companies engaged in ecclesiastical, charitable, benevolent or educational activities of a public character.
All enquiries on any aspect of this should be directed to:
Executive Chairman, Federal Inland Revenue Service, Revenue House, Plot 15 Sokode Crescent, Off Dalaba Street, Wuse Zone 5, Abuja. E-mail: [email protected]
Be sure to have the organization’s correct name and its headquarters location, if possible.