TITLE OF THE ARTICLE: Contending Issues on Bank Taxable Profits, Loss and Bad Debt in the Nigerian Banking Sector: An Appraisal.
AUTHOR:
OLOKOOBA S.M, LL.M (Ife), B.A (Hons.), P.G.D.E, LL.B, Ph.D., Unilorin, Lecturer and Formerly Coordinator, Department of Business Law, Faculty of Law, University of Ilorin.
ABSTRACT:
Despite the provisions of section 29(1) & 31(2) Companies Income Tax Act (CITA) on the constituents of company profits and tax treatment of loss deduction in the Nigerian banking sector, the industry is still experiencing some challenges in the determination of bank taxable profit, deductibility of loss and bad debt. Most of the available rules in CITA do not accommodate every new accounting principle especially, the more complex transactions. This paper appraises the tax issues in the deductibility of losses, and bad debts in the Nigerian Banking Sector and finds that there is yet to be a clear rule for determining the taxable bank profit before the deductibility of loss and bad debt in the Nigerian banking institutions. It recommends for a clearer rule for the determination of the taxable bank profits, amendment of section 29(1) & 31(2) of CITA and adequate use of Tax Information Circulars to forestall the collapse of the banking institution due to heavy tax burden.