Appraising the Tax Aspects of Capital Allowances in the Nigerian Banking Sector

Abstract

This paper appraises different types of capital allowances available in Nigeria as stated in the Nigerian Tax Laws as well as the items that qualify for capital tax allowances in the banking industry. Based on the appraisal, the paper discovers that the issue of capital allowances for banks is not a straight jacket thing. This is so, because there is yet to be a comprehensive list of what can qualify for such allowances under the Nigerian Tax Law and the system of making allowances does not look at the extent to which wear and tear has occurred on the expected life of the asset. The paper concludes that a general principle of taxation that encourages liberality should be the watchword when considering relief in the tax aspect of capital allowances in the banking sector.