10/12/2025
THE NEW TAX REFORM ACTS AND YOU
BECKLEY CONSULTING LTD TAX EDUCATION SERIES 5
WHAT IS TAXABLE PERSONAL INCOME? (2)
(b) Income from trade, business, investment etc
Income from trade or business is taxable after deducting expenses incurred in earning the income.
To determine profits from trade or business requires proper keeping of records of income and expenses that can be relied upon by tax authorities. Other sources of personal income include interest, rent, investment, commission etc.
The profit of an enterprise, no matter how much the turnover of the enterprise may be, is taxable as personal income of the owner. Though accounting principles regard the owner and his business as separate, the law regards them as the same if the business is not registered as a limited liability company.
Personal Income Tax Rates
The personal income tax rate bands apply to taxable personal income – income from employment, trade, business, interest etc.
Certain costs incurred by you are allowed to be deducted from your income before the tax rates above are applied. Such costs include: Pension contribution, Life insurance policy, rent relief of 20% of income subject to a maximum of N500,000 per annum, etc.
In our next edition, we will look at:
Tax Education Series 6 – Personal Income Tax Returns by Taxable Persons (Employment Income).
