CURRENT AFFAIRS

1. What is the meaning of AKD on the Motor Plate Number in Lagos State
___________

(a) Ikorodu (b) Ibeju Lekki (c) Oshodi (d) Lagos Island.

Answer is B

2. Which Ministry of Lagos State Government is responsible for the Control

and Certification of dredging activities in Lagos State.

(a) LSMWID (b) LASMIRA (c) LAMATA (d) Ministry of Works

Answer is A

Lagos State Ministry of Waterfronts infrastructure and Development

3. As at 2015, the Lagos State Internal Revenue Agency has ________

taxpayers on its database (a) 4.2 Million (b) 4.3 Million (c) 4.4 Million
(d) 4.5 Million.

Answer is D

4. Lagos State was created in the year ______________

(a) 1964 (b) 1965 (c) 1966 (d) 1967.

Answer is D.

5. __________ is the Clerk of Lagos State House of Assembly

(a) Hon. Wasiu Sanni (b) Hon Lateef Abiru (c) Hon Akeem Bello

Answer is C.

6. ___________ is the special Adviser to the Governor of Lagos State on

Civic Engagement .

(a) Kehinde Joseph (b) Adeniji Kazeem (c) Agboola Dabiri (d)
Ademola Abass.

Answer is A

7. The Lagos State Commissioner for Science and Technology is

__________

(a) Samuel Ojo (b) Mr Akeem Fahm (c) Olufemi Onanuga (d) Adeyemi
Olabinjo.

Answer is B.
8. Lagos State is bounded the North and East by ___________

(a) Republic of Benin (b) Ogun State (c) Oyo State (d) Atlantic Ocean.

Answer is B

9. The Deputy Speaker of Lagos State House of Assembly is __________

(a) Hon. Wasiu Sanni (b) Hon. Lateed Abiru (c) Hon. Tunde Braimoh
(d) Hon Akeem Bello.

Answer is A.

10. The following are not major revenue generating agencies is Lagos State
except _________

(a) LASAA (b) LAMATA (c) MVAA (d) LASTMA.

Answer is C

Major Revenue generating Agencies of Lagos State Government.

i. Lagos State Internal Revenue Service

ii. Motor Vehicle Administration Agency k
iii. Land Bureau
iv. Land Survey
v. Ministry of Housing
vi. Ministry of Finance
vii. Ministry of Physical Planning
viii. New Town Development Authority.

11. What year was the First Taxation Skakeholders Conference held in
Lagos State ______________

(a) 2005 (b) 2006 (c) 2007 (d) 2008.

Answer is C

This was introduced during the last regime of Mr. Babatunde Fashola –
Governor of Lagos State in 2007, to appreciate and showcase the beauty
of tax beauty of tax payment and its benefits.

12. The slogan of Lagos State is

(a) Centre for Advancement (b) Mega City (c) Centre for Excellence
(d) Centre for Excelling.

Answer is C.
13. The current Executive Cabinet of Lagos State were sworn-in on the
___________

(a) 9th November, 2015 (b) 12th October, 2015 (c) 19th October, 2015
(d) 26th October, 2015.

Answer is C

14. __________ is the Representative Member for Alimosho at the House of

Representatives.

(a) Hon. Jimoh Olajide (b) Hon. Bolaji Ayinla (c) Hon. Badru Enitan
(d) Hon Olufemi Adebanjo.

Answer is D.

15. Which of the following is not a Division synonym of IBILE _______

(a) Ikeja Division (b) Epe Division (c) Badagry Division (d) Ibeju
Lekki Division.

Answer is D

16. __________ is the Special Adviser on Overseas Affairs & Investment,

Lagos State.

(a) Olawale Oluwu (b) Agboola Dabiri (c) Steve Ayorinde (d) Ademola
Abass.

Answer is A.

17. What is the meaning of LSD on the Motor Plate Number in Lagos State
___________

(a) Somolu (b) Surulere (c) Oshodi (d) Lagos Island

Answer is C.

18. Hon. ___________ is the Representative member for Agege II at the

Lagos State House of Assembly.

(a) Hon. Akeem Bello (b) Hon. Dayo Fafunmi (c) Hon. Tunde Braimoh
(d) Hon. Oluyinka Ogundimu.

Answer is D

19. What is the amount payable for the replacement of E-TCC in Lagos State
__________

(a) N1,000 (b) N2,000 (c) N1,500 (d) N2,500

 Answer is A

The new Management has reduced the amount payable for the
replacement of E-TCC from N2,500 to N1,000

20. What are the Lagos State Emergency Numbers ____________

(a) 112 & 776 (b) 676 & 121 (c) 211 & 677 (d) 767 & 112.

Answer is D

The Lagos State Emergency Numbers are 767 and 112.

21. What is the Total Internally Generated Revenue by Lagos State Internal
Revenue Service for the Fiscal Year ended 31st December, 2015

(a) N237,368.901,169.44 (b) N279.872.967,376.44

(c) N256,674.977,376.44 (d) N287,567.093,609.44.

Answer is A

The Total Internally Generated Revenue for 2015 amount to

N279,872,967,376.44 while the Revenue generated by the Lagos State
Internal Revenue Service for the same period is N237,368,901,169.44

22. __________ is the Commissioner for Economic Planning and Budget

(aa) Oluwatoyin Suarau (b) Gbolahan Lawal (c) Rotimi Ogunleye (d)
Mr Segun Banjo.

Answer is D

23. ___________ is the Commissioner for Commerce, Industry and

Cooperatives.

(a) Oluwatoyin Suarau (b) Gbolahan Lawal (c) Mrs Olayinka

Oladunjoye (d) Akinyemi Ashade.

Answer is C

24. Prince Anofi Elegushi is the Special Adviser in change of ________

a) Central Business District (b) Ministry of Commerce (c) Ministry of

Education (d) Ministry of Housing.

Answer is A
HANDBOOK

1. The LIRS Vision Statement is focused on ________

(a) The Agency (b) Taxpayers (c) Government (d) Foreigners.

Answer is A

2. What is the Mandatory Age of Retirement in LIRS

(a) 50 years (b) 55 years (c) 60 years (c) 65 years.

Answer is C

3. LIRS shall provide medical treatment to an employee, spouse and

__________ dependants.

(a) 3 dependants (b) 5 dependants (c) 4 dependants (d) 2 dependants.

Answer is C.

4. Confirmed staff in the event of protracted illness other than those arising
from his/her negligence or personally induced shall be entitled to
_________ month full pay and __________ month half pay.

(a) One & Two Months (b) One & Three Months (c) One & Five
Months (d) One & Six Months.

Answer is C

5. An Employee monthly loan repayment (excluding housing loan) should

not exceed __________ of the salary.

(a) 31% of the Salary (b) 32% of the Salary (c) 33% of the Salary
(d) 34% of the Salary.

Answer is C.

6. The Director of Finance & Accounts, Lagos State Internal Revenue

Service is ___________

(a) Ayodele Adebayo (b) Seyi Alade (c) Owolabi Kamson (d) Maruf
Tijani.

Answer is D

7. The LIRS Mission Statement is focused on __________

(a) The Agency (b) Taxpayers (c) Government (d) Foreigners.

 Answer is B.

8. The Lagos State Internal Revenue Service has _________ & _______
numbers of Tax Stations and Mini Tax Stations (a) 37 & 39 Stations (b)
36 & 40 Stations (c) 37 & 36 Stations (d) 37 & 40 Stations.

Answer is A

9. Lagos State has __________ number of colours

(a) 5 Colours (b) 3 Colours (c) 4 Colours (d) 6 Colours.

Answer is C

10. The LIRS has ___________ number of Revenue Managers among its
Management Team.

(a) 20 Members (b) 21 Members (c) 22 Members (d) 24 Members.

Answer is B

Please kindly verify as the number may change at any point in time.

11. Arranging official visitations by the Executive Chairman and Board

Members including coordinating reception for the Boards special guests
is handled by which unit ____________

(a) Corporate Unit (b) Protocol Unit (c) Board Secretary (d) Special
Duties Unit.

Answer is B

Please kindly verify at this information may change at any point in time.

12. On what condition can a waiver be given by the Executive Chairman

from an employee’s former employee?

(a) Liquidation o the company (b) victimization of the employee (c)

Cessation of the company (d) If the employee is transferring from the
Lagos Stat Civil Service.

Answer is D

A copy of letter of resignation and transfer of service to Lagos Internal

Revenue Service will suffice

13. Probation period of transferees from the Lagos State Civil Service whose
appointment are adjudged confirmed from the date of transfer of service
is?
 (a) 1 month (b) 0 months (c) 6 months (d) 3 months

Answer is B

Its Automatic

14. The Review Unit is headed by ___________

(a) Mr. Rasheed Olu-Ajayi (b) Mr. Taofeek Oretuga (c) Mr. Tunji
Osuntokun (d) Mr. Femi Amosu.

Answer is B

Please kindly verify as this information may change at any point in time.

PIT

1. Land Use Charge assessment is consolidation of _________, _______

and _________

(a) Land Rent, Tenement Rate & Neighborhood Charge (b) Tenement
Rate, Ground Rent & Neighborhood Charge (c) Tenement Rate, Radio
Licence & Neighbourhood Charge (d) Tenement Rent, Land Rate &
Neighbourhood Charge.

Answer is B

Tenement Rate, Ground Rent & Neighbourhood Charge.

2. MARADE NIGERIA

COMPUTATION OF CAPITAL GAINS TAX PAYABLE FOR 2009

TAX YEAR

Sales Proceed 18,000,000

Deduct: COST OF PART SOLD:

Cost of Acquisition 25,000,000

Add: Allowable Incidental Expenses:

Cost of Renovation 2,400,000

TOTAL COST OF ASSET 27,400,000

ATTRIBUTABLE PART SOLD:

A X C = 18,000,000 X 27,000,000

A + B = 18,000,000 + 5,000,000 (21,442,478)

Chargeable Loss 3,443,478

Where:

A = Sales Proceed or Market Value of Part Sold

B = Market Value of Unsold Part

C = Total Cost of the Asset

3. Wharf Landing Fee is shared amongst the beneficiaries every

_________

(a) Month (b) 3 Months (c) 6 Months (d) 12 Months.

Answer is B

4. Where a collecting agent fails to make a return or remittance, the Service

may make an estimate of tax due and may order the tax payer in writing
to pay an estimated amount to the State Government within.

(a) 7 days (b) 14 days (c) 21 days (c) 30 days.

Answer is C

5. Any Director, Manager or Employee who fails to comply with the

provision of HORCL is liable on conviction to a penalty of?

(a) N2,000,000 or 6 Months imprisonment or both (b) 6 Months

imprisonment plus N2,000,000 (c) N2,000,000 or 3 Months
imprisonment or both (d) 3 Months imprisonment plus N2,000,000.

Answer is A

6. Any person aggrieved by an assessment made by LIRS under HORCL

shall within how many days notify the Chairman to review, amend or
reverse the assessment.

(a) 7 days (b) 14 days (c) 21 days (d) 30 days.

Answer is A

7. Any person, Corporate or otherwise, who uses an Hotel or its facilities,

will pay?

(a) Value Added Tax (b) Hotel Consumption Tax (c) Withholding Tax
(d) Charges.

Answer is B
8. Any Hotel, Restaurant or other businesses affected by the Hotel
Occupancy and Restaurant Consumption Law shall register with LIRS
within __________ days from commencement of the Law or business.

(a) 20 days (b) 25 days (c) 30 days (c) 31 days.

Answer is A

The Hotel Occupancy and Restaurant Consumption Law stipulates that

Any Hotel, Restaurant or other businesses affected by the Hotel
Occupancy and Restaurant Consumption Law shall register with LIRS
within 30 days from commencement of the law or business

9. Tax revenue collected by an Agent under the HORC Law must be

remitted to government within __________ days from the end of the
reporting month.

(a) 10 day (b) 20 day (c) 21 day (d) 31 day.

Answer is B

All Revenue so collected under the Hotel Occupancy and Restaurant

Consumption Law must be remitted on or before the 20th day of the next
reporting month to the government Coffers.

10. The land Use Charge law was enacted in which year

(a) 2001 (b) 2009 (c) 1999 (d) 2010.

Answer is A

11. An aggrieved Tax payer against a Land Use Charge assessment on the
precondition that the Chargee pays ___________ of the amount assessed
and fees would be prescribed by the Appeal Tribunal

(a) 30% (b) 50% (c) 25% (d) 75%.

Answer is B.

12. Which of the following statement is false about the disadvantage of the
Land Use Charge law?

(a) Prevention of multiplicity of taxes between the State and the Local
governments in Lagos State (b) The high rate of tax would discourage
property development and investment (c) The Housing requirements of
the Citizens residing in Lagos State and rentals payable per annum are
expected to worsen (d) The tax would further discourage mortgages and
perfection of property/land titles.
 Answer is A

Prevention of multiplicity of taxes is an advantage.

13. Which of the following laws was enacted on the 22nd of June 2001

(a) Wharf Landing Fee (b) Land Use Charge (c) Hotel Occupancy
Restaurant Consumption Law (d) None of the above.

Answer is B

Wharf Landing Fee was enacted on the 16th of March, 2009 and Hotel
Occupancy law was enacted on the 22nd of June, 2001.

14. An Expirtrate shall be liable to Personal IncomeTax in Nigeria due to the

following except

(a) He is not liable to tax in another Country which has double taxation
agreement (DTA) with Nigeria (b) If he is Nigeria for an aggregate of
183 days in any twelve (12) month period (c) the Employment costs are
charged to a Nigerian Company (d) He is a Diplomat and possesses a
Diplomatic Status.

Answer is D

Diplomatic are not liable to tax in Nigeria but in their home country.
However a Diplomat is different from an Expirtrate.

15. The difference between the Total Income and Tax paid is known as

(a) Assessable Income (b) Total Assessable Income (c) Disposal Income
(d) Chargeable Income.

Answer is C

Assessable income is income from each source from the preceding year.
Total Assessable income is the addition of all Assessable income of an
individual for the Year of Assessment. Chargeable Income is the Gross
Income less statutory Allowances and deductions.

16. When a Tax Authority is of the opinion that a person liable to Tax has
been under – assessed, __________ may be revised

(a) Back Duty Assessment (b) Original Assessment (c) Best of Judgment
(d) Additional Assessment.

Answer is D
 Back Duty is a form of additional assessment of any income before the
Year of Assessment. Original Assessment is known as Normal
Assessment for actual year of employment income or preceding year for
business profession or vocation. Best of judgment is given if a tax payer
fails to give any other information required from him

17. Which is correct about the registration requirements of employees of

labour under PAYE (a) Letter of intent on a paper (b) Tax clearance
certificate of two senior Officers (c) Memorandum and Articles of
Association (d) None of the above.

Answer is C

The letter of intent must be on the Employer’s Letter-headed paper. Tax

Clearance certificate of at least two.

18. Which of this is not a content on a Notice of Assessment

(a) Right of objection (b) The enabling Tax Law (c) Double Taxation
Relief (d) The year of future Assessment.

Answer is D

There is no such thing as Year of future taxation in Taxation.

19. WHT rate for Direction fee on Companies and Individuals respectively is

(a) 10% and 10% respectively (b) 10% and 5% respectively (c) 5% and
10% respectively (d) 5% and 5% respectively.

Answer is A

WithHolding Tax for Directors fee is 10%. Its also the same rate for
Companies and Individuals.

20. All of these transactions are exempted from WHT except

(a) All imported goods (b) All exported goods (c) Inter – Bank interests
(d) Interest on Bonds.

Answer is B.

21. Section 85(7) states that fine for obtaining tax clearance through
misrepresentation, forgery and falsification is?

(a) N50,000 (b) N50,000 plus twice the tax payable by him (c) N50,000
plus twice the tax payable by him or 3 years imprisonment (d) N50,000
plus twice the tax payable by him or 3 years imprisonment or both.
Answer is D.

22. Section 85(9) states that Corporate bodies or Government Institutions that
fail to comply with the requirements of tax clearance is to pay a fine of

(a) N50,000 or imprisonment for 3 years or both fine and imprisonment

(b) N500,000 or imprisonment for 3 years or both fine and imprisonment
(c) N5,000,000 or imprisonment for 3 years or both fine and
imprisonment (d) N500,000 or imprisonment for 6 months or both fine
and imprisonment.

Answer is C

23. Where a tax payer agrees with an assessment, the position of the law is
that the tax must be remitted within

(a) 7 days (b) 14 days (c) 60 days (d) 90 days.

Answer is C

60 days or two months

24. Where a tax payer disagrees with an assessment, he or she must give
notice of objection in writing to the relevant tax authority within
___________? (a) 7 days (b) 14 days (c) 30 days (d) 60 days.

Answer is C

30 days

25. All of these statements are condition for a valid notice of Assessment
except _________?

(a) It must be made in writing addressed to the Chairman of the Board

(b) It must be made within the statutory time limit of thirty days of the
receipts of Assessment (c) It must contain the precise grounds of
objection (d) The tax Appeal tribunal helps in computing the tax
assessment after an objection has been done.

Answer is D

26. All appeals shall be tabled before the Tax Appeal Tribunal (TAT) which
is directly supervised by ___________

(a) Joint Tax Board (b) Federal Inland Revenue (c) Body of Appeal
Tribunal (d) Appeal Court.

Answer is B
27. Failure to pay income charged by an assessment within 2 months after
notice attracts ____________

(a) A penalty of 10% per annum of tax to the income charged (b) A
penalty of 10% per annum of tax to the income charged plus two months
imprisonment (c) A penalty of 10% per annum of tax to the income
charged plus two months imprisonment or both (d) A penalty of 10%
per annum tax owned plus twice the amount of Tax to be paid.

Answer is A

28. Failure by the employer to deduct or properly account for deduction from
emoluments paid to an employee attracts a penalty of ___________

(a) The amount owed plus 10% per annum of the amount plus interest at
the prevailing commercial rate (b) The amount owed plus 5% per annum
of the amount plus interest at the prevailing commercial rate plus three
months imprisonment or both (c) 10% of the amount owed plus 21% of
tax payable or Central Bank of Nigeria’s commercial rate (d) 10% of the
amount owed plus 21% of tax payable plus six months imprisonment or
both.

Answer is A

29. A person giving incorrect information about the tax liability for the
purpose of obtaining tax clearance certificate is liable to a penalty of

(a) N50,000 plus twice the tax payable (b) N100,000 or three years
imprisonment (c) N50,000 or three years imprisonment (d) N50,000
plus twice the tax payable by him or three years imprisonment or both.

Answer is D

30. Failure to comply with any provision of tax law where there is no specific
penalty attracts ___________?

(a) N200 in the first instance and N40 for everyday of default (b) N5,500
in the first instance and N100 for everyday of default (c) N200 in the
first instance and N40 for everyday of default plus 6 months
imprisonment (d) N5,000 in the first instance and N100 for everyday of
default plus 6 months imprisonment if failure continues.

Answer is D

31. Impersonation by a staff or anybody who collects or attempts to withhold

for own use any amount collected or demand tax assessment in excess
will have a penalty on conviction of ___________?
 (a) N100,000 or 3 years imprisonment or both (b) N50,000 or 3 years
imprisonment or both (c) N100,000 or 6 months imprisonment or both
(d) N50,000 or 6 months imprisonment or both.

Answer is A.

32. All of these are assessed on an actual year basis except.

(a) National Housing Fund (b) Life Assurance Premium (c) Gross
employment income (d) Contributory pension.

Answer is B

33. Which of the following depicts what Consolidated Relief Allowance

(CRA) is

(a) N20,000 or 1% of Gross income whichever is higher + 20% of Gross

Income (b) 20% Gross Income + N200,000 or 1% of Gross Income
whichever is higher (c) N200,000 or 20% of Gross Income whichever is
higher + 20% of Gross Income (d) 20% of Gross Income + N2% of
Gross Income or N200,000 whichever is higher.

Answer is B

34. Gross Employment Income can be made up of any of the following

(a) Miscellaneous (b) Compensation (c) Utility (d) All of the above.

Answer is D

35. A type of retirement plan set up by a company for the benefit of its
employees is known as ___________?

(a) Superannuation (b) Fringe Benefits (c) Perquisites (d) None of the
above.

Answer is A

Fringe benefits and perquisites are also known as Benefits in King

(B.I.K)

36. Which of the Fringe Benefits is not exempted from tax

(a) Cost of energy by Employee where paid by Employer (b) Meals in

the Employer’s Canteen (c) Uniforms, overalls and protective clothing
(d) Payment to employee for relocation.

Answer is A

37. An individual must file his tax returns on or before ___________

 (a) 31st of January (b) 31st of February (c) 31st of March (d) 31st of
December.

Answer is C

Part VI, Section 40 of Personal Income Tax Act, stipulates persons

Chargeable Ruturns Filling.

38. Back – Duty Exercise in taxation is for at most __________ years,

except in cases of fraud

(a) 6 years (b) 7 years (c) 8 years (d) 10 years.

Answer is A

This occurs as a result of suspicion of fraud in an organization.

39. Religious Organizations are subjected to tax liability on _________

income only

(a) global Income (b) Business income (c) Offering Income (d)
Donations.

Answer is B

Religious Organisation of Ecclesiastes Societies are not taxable based on

Religious Offerings and Donations, but their Incomes from Business
Activities like Sales of Tapes, Books, Profit from (Educational) Schools
Operations. Etc.

40. Year of Assessment with respect to individuals means a period of

_________ months.

(a) 6 month (b) 10 months (c) 12 months (d) 15 months.

Answer is C

According to Basis Period, every Normal business mu operate for a

complete period of 12 Calendar Month. Any business that either operate
for less than or greater than 12 Calendar Months is refers to as Abnormal
business.

41. Where an employer’s asset is put in the Employees use such employee
will be charged _________ of the market value of the asset as Benefit in
kind.

(a) 2% (b) 5% (c) 10% (d) 15%.

Answer is B
 Where an Employer owns an asset, the employee is charged 5% of the
assets being enjoyed, but where the employer hires or rent the asset, the
employee will be charged the total amount paid for the hire or rent.

42. Which part of the personal income tax act stipulates Assessment:

(a) Part V (b0 Part IV (c) Part X (d) Part VII

Answer is D

Part VII of Personal Income Tax Act 1993, as amended stipulate the
Assessment of Incomes and Chargeable Persons.

43. The Maximum leave allowance that is tax exempt is _________ % of

Basic Salary

(a) 5% (b) 10% (c) 15% (d) 20%.

Answer is B

10% of Annual Basic Salary is granted as Annual Leave Allowance to all

employees in Employment.

44. What is Capital Gains Tax Rate ____________

(a) 5% (b) 10% (c) 15% (d) 20%.

Answer is B

It is a Flat rate at which Gains on Capital disposal of Assets are subjected

to Taxation .

45. What is the option available to an individual under the Commencement

Rule?

(a) 2nd & 3rd Tax year (b) Right Election (c) Right of Taxation (d) 2nd
Tax Year only.

Answer is B

It is the Tax payer that has or owns the option under Commencement
Rule which is the Right of Election and this is limited to the 2 nd and 3rd
Tax Years.

46. The penalty for failure to deduct or remit withholding tax is a fine of
_________ % of the unremitted tax

(a) 2% (b) 55 (c) 10% (d) 15%.

Answer is C
 5% of the unremitted Withholding Tax shall be paid as penalty for not
deducting or remitting as at when due of such Withholding Taxes failed
to so deduct or remitted.

47. ___________ is Taxable Income under the Personal Income Tax Act
(a) Petroleum Profit (b) Company Profit (c) Profit on Sale of Asset (d)
Partnership Profit.

Answer is D

Profit earned from Partnership business is Taxable in the hands of the

individual Partners under the Personal Income Tax Act, as Taxable
Persons.

48. Self employed individuals are assessed to Personal income Tax on

_________ basis.

(a) Direct Assessment (b) Actual Year Basis (c) PAYE (d) Preceding
Year Basis.

Answer is D

Every Business Enterprise, Venture or Limited Liability Company are

expected to operate for 12 calendar months and filled their returns for Tax
purposes on a Preceding Year Basis. Such business activities must have
been concluded in the year preceding the year of Assessment.

49. What rule will be applicable income of an individual in new trade,

business, profession or vocation in Nigeria.

(a) Commencement Rule (b) Cessation rule (c) Actual year rule (d)
Preceding year rule.

Answer is A

Every new businesses will be assessed to Tax on the Commencement

Rule in order to ensure all Assessable Income are subjected to Taxation.

50. What is the rate at which tax is to be deducted for the purpose of
withholding tax deduction on royalty ____________

(a) 2% (b) 5% (c) 10% (d) 15%

Answer is B

Withholding Rate deductible on Royalty for Individuals as regarding

State Board of Internal Revenue is 5% , while for Limited Liability
Companies is 15%.
51. Part F of the Form A of Lagos State Internal Revenue Service stipulates
____________

(a) Personal Details (b) Benefits in Kind (c) Statements of Income

(d) Claims for Allowances.

Answer is D

Form A of the Lagos State Internal Revenue has various parts for
different reasons and Part F is about claims for Allowances.

52. What is the highest tax rate under Personal Income Tax __________

(a) 20% (b) 21% (c) 22% (d) 24%.

Answer is D

The highest Tax rate according to the Sixth Schedule of Personal Income
Tax Act is 24%, while the lowest is 1% Minimum Tax

53. Where the total reliefs and allowances granted to individual tax payer is
greater than his/her taxable income, he/she is allowed to pay _________
percent of such income

(a) 0.50% (b) 1% (c) 5% (d) 7%.

Answer is B

Individual Taxpayer in this category are required by law to pay the 1%

Minimum Tax of their Gross/Assessable Income.

54. Profit on sale of asset is allowed as income under __________ Tax

computation.

(a) Personal Income Tax (b) Company Tax (c) Capital Gains Tax (d)
Withholding Tax.

Answer is C

Every Income has its category of Tax Computation. Profit on sale of

Asset will be charged to Tax under the Capital Gains Tax Act.

55. When rental income is received in advance for a period of five (5) years,
it will be compressed into ___________ and taxes accordingly on yearly
basis

(a) 2 years (b) 3 years (c) 5 years (d) 10 years.

Answer is C.
56. What is the tax payable on the income of N24,000,000

(a) N2,467,000 (b) N3,045,500 (c) N4,726,400 (d) N5,155,300.

Answer is C

Gross Income N24,000,000

Less: Statutory Deductions:

CRA (20% x 24,000,000 + 1% x 24,000,000) (5,040,000)

Taxable Income 18,960,000

300,000 7 21,000

300,000 11 33,000

500,000 15 75,000

500,000 19 95,000

1,600,000 21 336,000

560,000

15,760,000 24 3,782,400

Tax Due 4,342,400

57. Employers are required by Personal Income Tax Act to file End of the
year Returns on or before _____________

(a) 1st of January (b) 31st of January (c) 1st of March (d) 31st of March.

Answer is B

Part VI of the Personal Income Tax Act mandates all employees of

Labour to file the End of the Year Returns with the Relevant tax
Authority.

58. Connected Person’s or Fictitious Transaction is also regarded as

___________

(a) Arm’s Length (b) Artificial Transaction (c) Illegal Transaction (d)
Online Transaction.

Answer is B
 Any Business Transaction must be done at Arm’s length, any transaction
outside this is regarded as Artificial, Fictitious Transaction because it is
always carried out by or between connected or known persons.

59. The period of filling Notice of Assessment is ___________

(a) 20 days (b) 30 days (c) 60 days (d) 90 days.

Answer is D

The grace period granted all individuals in filling their returns is 90 days.

60. In computing tax liability of a sole proprietor, __________ is granted in

lieu of depreciation.

(a) Qualifying Expense (b) Initial Allowance (c) Annual Allowance (d)
Capital Allowance.

Answer is D

Depreciation is an Allowance granted by Accountant for the wear and

tear of an asset, Capital Allowance is granted by Tax Authority for
Qualifying Capital Expenditure (Asset) so employed by the business.

61. Calculate the Tax due, when the Chargeable Income is N3,600,000

(a) N340,000 (b) N420,000 (c) N665,000 (d) N680,000.

Answer is C

Chargeable Income = N3,600,000

Taxable Income Rate Tax Due

300,000 7 21,000

300,000 11 33,000

500,000 15 75,000

500,000 19 95,000

1,600,000 21 336,000

560,000

400,000 24 96,000

Tax Due 656,000

62. Ascertainment of Assessable Income is found in which Part of the
Personal Income Tax Act?

(a) Part III (b) Part IV (c) Part IX (d) Part VII

Answer is A

Part III of the Personal Income Tax Act Stipulates the Ascertainment of
Assessble Income for Taxation .

63. The process of assessing and collecting taxes from individuals and
companies by the relevant to authority is known as ____________

(a) Tax Computation (b) Tax Assessment (c) Tax Administration (d) Tax
Auditing.

Answer is A.

64. Preliminary Expenses in Tax Computation is treated as ___________

(a) Allowable Expenses (b) Disallowable Expenses (c) Taxable Income

(d) Non Taxable Income.

Answer is B

Preliminary Expenses are incurred before the commencement of the

business. It is also refers to as pre – operational cost which cannot be
deducted from the income or profit generated by the business in
subsequent years. These expenses should be borne by the promoters of
the business.

65. Perquisites given to an employee by the employer is known

as ___________

(a) Performance Bonus (b) benefit in kind (c) Amortization

(d) Employee’s Benefit.

Answer is B

Perquisites are those non – monetary benefits or expenses provided by the

employer for the employee to ease the operations of the latter’s duties.
The monetary values of these fringe benefits though received in cash are
still regarded as part of the taxable income of the employee. While
perquisites are regarded as incomes in the hands of the employees, they
are considered as non taxable expenses in the hands of the employer and
hence deducted from the total chargeable income of the employer. These
include Residental Accomodation, Domestic Servants, furnitures and
Fittings, Motor Vehicles etc.
66. A foreign individual who is not resident in Nigeria but derives investment
income from Nigeria, withholding tax on such investment income is
payable to ___________

(a) Ministry of Finance (b) Federal Inland Revenue Service (c) State
Board Internal Service (d) Joint Tax Board.

Answer is B

The Federal Inland Revenue Service is solely responsible for the

Assessment and Collection of Taxes due from Non – Resident
Individuals who do businesses in Nigeria.

67. Advertisement Fee incurred under Capital Gains Tax is treated

as _____________

(a) Allowable Expenses (b) Taxable Income (b) Disallowable Expenses

(d) Non – Taxable Income.

Answer is A

Some expenses incurred under the Capital Gains Tax are Allowable and
some Disallowable in the course of purchase, acquisition and disposal of
chargeable assets Advertisement is one of the Allowable Expenses.

68. Undistributable income from Trust is taxed in the hands of __________

(a) Beneficiaries (b) Trustee (c) Owners (d) Trust.

Answer is B

Any Income kept as undistributed by the Trustee after fulfilling all

statutory payment obligations are taxable in the hands of the Trustee,
Executors or Administrators, while all Statutory payment or distribution
made from the Trust, Estate or Settlement are taxable in the hands of the
Beneficiaries.

69. A person who share in the leftover income under Trust & Settlement is
refer to as _____________

(a) specific Legatee (b) Residual Legatee (c) Beneficiary (d) Fixed
Annuitant.

Answer is B

This is a person who shares in the leftover of the income after all other
people entitled to share in the income of the deceased might have been
settled or satisfied.
 Residual Legatee are not direct beneficiary but are considered by the
deceased.

70. There are ___________ classes of Capital Allowance

(a) 4 Classes (b) 5 Classes (c) 6 classes (d) 8 classes.

Answer is A

Types of Capital Allowances

A. Initial Allowance
B. Annual Allowance
C. Balancing Adjustment Allowance

1. Balancing Allowance

2. Balancing Charge

D. Investment Allowance

1. Investment Allowance on Plant and machinery

2. Rural Investment Allowance.

71. The Initial and Annual Allowance for furniture and fittings are
__________ and __________

(a) 20% & 25% (b) 25% & 20% (c) 10% & 25% (d) 15% & 20%.

Answer is B

Capital Allowance rate for furniture & Fittings are 25% for Initial
Allowance and 20% for Annual Allowance.

72. A Franked Investment Income yet to suffer Withholding Tax shall be

treated as ____________

(a) Allowable Expenses (b) Disallowable Expenses (b) Taxable Income

(d) Non Taxable Income.

Answer is C

Franked Investment Income Includes Divided and Interest, which suffers

Withholding Tax at source and becomes final tax in the hands of the tax
payer, but where its yet to suffer Withholding Tax at source, such will be
deemed as other forms of income.

73. Qualifying Capital Expenditure has __________ types

 (a) 6 types (b) 7 types (c) 8 types (d) 10 types.

Answer is C

CATEGORIES OF QUALIFYING CAPITAL EXPENDITURE (QCE)

A. Qualifying Plant Expenditure

B. Qualifying Building Expenditure

i. Industrial Building

ii. Non – Industrial Building

C. Qualifying Mining Expenditure

D. Qualifying Plantation Expenditure

E. Qualifying Research and Development Expenditure

F. Qualifying Public Transportation Motor Vehicle Expenditure

G. Qualifying Agricultural Expenditure

H. Qualifying Public Transportation (Inter –City) Mass Transit

Coaches Expenditure

74. Non – Chargeable assets under Capital Gains includes _____________

(a) Options (b) gifts (c) debts (d) shares.

Answer is B

NON CHARGEABLE ASSETS

Gifts

Private resident or dwelling house

Chattel sold for N1,000 or less

Decorations, Awards, etc

Compensation for loss of office

Compensation from injury or damaged suffered

Life Assurance Policy

Unit Trust Scheme

Shares and Stocks

 Nigerian Currency

Assets disposal by Organisations exempted from tax.

75. Life Assurance Policy Relief and Allowance is granted on __________

(a) Actual Year Basis (b) Current Year Basis (c) Carry Forward Basis
(d) preceding year Basis.

Answer is D

This is granted based on the Life Assurance Premium paid in the

preceding with evidences to back such claims

76. Trust, Estates & Settlements are stated in __________ Schedule of the
Personal Income Tax Act

(a) First Schedule (b) Second Schedule (c) Fifth Schedule (d) sixth
schedule.

Answer is B

Second Schedule of the Personal Income Tax Act Stipulates the provision
for Assessment and computation of taxable persons under the Trust,
Estates and Settlements.

77. Withholding Tax paid on Rental income is claimable as _________

(a) Tax credit (b) Tax relief (c) tax allowance (d) none of the above.

Answer is A

Withholding Tax paid on some withholding incomes excluding Dividend

Interest are used as Tax credit from Tax Due to arrive at Tax Payable.

78. Donations is treated under personal Income Tax as __________

(a) Allowable Expenses (b) Disallowable Expenses (c) Taxable Income

(d) Non – Taxable Income.

Answer is B

Donation to a large extent is an expenses under in reducing Tax Liability

and become Disallowance if; its to unapproved bodies or funds and non
exceeding 10% out of the profit, General Donations with no title, etc.

79. Profit on disposal of Assets is treated as ___________

(a) Allowable Expenses (b) Disallowable Expenses (c) Taxable Income

(d) Non Taxable Income.

Answer is C
 Every Income has its category of Tax Computation. Profit on sale of
Asset or Loss on disposal of Asset will be charged to Tax under the
capital gains Tax Act, so become Taxable income because it has been
used in reducing the Assessable Income of the business in the Profit and
Loss Account, which will now be added back.

80. The process of determining if a profit is derived from business activities

is ____________

(a) System of Trade (b) Test of Trade (c) Principle of Trade (d)
Taxation.

Answer is B

TEST OF TRADE

It is the process of determining if gain or profit derived from such

activities is to be subjected to tax. This includes:

Motives

Method of Acquisition

Nature of the Articles

Modification

Time lag between Purchase and Sale

Number of Transaction.

81. Part B of the Abridged Form of Lagos State Internal Revenue Service
Stipulates _____________

(a) Personal Details (b) Benefits in Kind (c) Sources of Income

(d) Claims of Allowances.

Answer is C

Part B of the Abridged Form of Lagos State Internal Revenue Service

stipulates the Sources of Income of all taxpayers.

82. There are ____________ types of Withholding Income

(a) 11 Types (b) 12 Types (c) 13 Types (d) 14 Types.

Answer is C

CATEGORIES
 A. Investment Income
B. Service Income

RATES OF WITHOLDING TAX

A. INVESTMENT INCOME %

Interest 10

Dividend 10

Rent 10

Royalty 5

B. SERVICES INCOME

Director’s Fee 10

Consultancy Fee 5

83. Mrs Omobanke bought a house for N5,500,00 in 2010 in 2010 she
incurred renovation cost of N850,000. She later sold the house for
N11,000,000 in 2013, while paying Lawyer’s fee for N500,000. What is
her year of assessment?

(a) 2010 (b) 2011 (c) 2012 (d) 2013.

Answer is D

In Capital Gains Computation, chargeable gains are assessed to tax in the

year the asset(s) are disposed.

84. What will be Mrs. Omobanke Chargeable Gins Tax Payable for the
relevant year of assessment?

(a) N415,000 (b) N423,000 (c) N515,000 (d) N523,000

Answer is A

MRS,. OMOBANKE

COMPUTATION OF TAX PAYABLE

Sales Proceed 11,000,000

Less: Incidental Cost: Lawyer’s Fee (500,000)

\ Net Sales Proceed 10,500,000

 Less:

Cost of Acquisition 5,500,000

Add: Renovation Cost 850,000 (6,350,000)

Chargeable Gains 4,150,000

Tax payable: 10% x 4,150,000 = N415,000

85. Bad Debt recovered under Business Taxation Computation is treated as

___________

(a) Allowable Expenses (b) Disallowable Expenses (c) Taxable Income

(d) Non Taxable Income.

Answer is C

Any Money so recovered from debt is seen as Revenue Income (Income

Recognition Accounting: Accrual & Cash Basis) therefore becomes
Taxable Income.

86. What is the Gross Income of a N14,000 Tax Paid for Personal Income
____________

(a) N500,000 (b) N600,000 (c) N750,000 (d) N800,000

Answer is A

Tax Paid = N14,000

200,000 100/7 14,000

i.e 200,000 + 200,000

0.8 = N500,000

Note: Add up all the Taxable Income Rate plus N200,000 and divided 0.8,
which is the 80% balance of the CRA’s 20% i.e Gross Income = N500,000.
Tax Paid = N14,000.

87. Which Schedule of the Personal Income Tax Act stipulates the Capital
Allowances:

(a) First Schedule (b) Second Schedule (c) Fifth Schedule (d) Sixth
Schedule.

Answer is C.
88. Where a Franked Investment Income has suffered Tax as source is treated
as ____________

(a) Non Taxable Income (b) Unearned Income (c) Taxable Income
(d) Earned Income.

Answer is A

Franked Investment Income are Non Taxable Income because it has

suffered taxation in Withholding form and therefore becomes final tax in
the hands of the tax payers.

89. What is the penalty for failure to file deduct or remit tax ___________

(a) N50,000 (b) N5,000,000 (c) N500,000 (d) N50,000,000

Answer is C

90. The tax arrived at by imposition on an assumed income is called

_________

(a) Best of Judgment (b) Notice of Assessment (c) presumptive Tax

(d) Tax Liability.

Answer is C

Concept of ‘Presumptive Tax’

Presumptive tax is that tax arrived at by imposition on an “assumed

income” of a taxpayer. The income is ‘assumed’ because the taxpayer
does not keep records of his business activities on which to base his tax
liability.

91. Sales proceed made from the disposal of an asset above its scrap value is
___________

(a) capital gains (b) balancing charge (c) balancing allowance

(d) capital allowance.

Answer is B

92. Profit on disposal of Assets is treated as _________

(a) Allowable Expenses (b) Disallowable expenses (c) taxable income

(d) Non – taxable income.

Answer is D

Every Income has its category of Tax Computation. Profit on sale of

Asset or Loss on disposal of Asset will be charged to Tax under the
 Capital Gains Tax Act, so become Taxable Income because it has been
used in reducing the Assessable Income of the business in the profit and
loss Account, which will not be added back.

93. The process of Re-Investing Sales Proceed on Asset into same line of
Asset is ____________

(a) Capital Gains (b) Roll – Over Relief (c) Balancing Allowance
(d) Capital Allowance.

Answer is B

ROLL – OVER RELIEF: this is where the proceeds on disposal of capital

asset are re – invested in acquiring another asset of same class.

94. ____________ creates a Trust to be managed for the benefit of some

beneficiaries.

(a) Settlor (b) Deceased (c) In – Testate (d) Landlord.

Answer is A

95. Education Tax is charged on _____________

(a) Gross Income (b) Assessable Income (c) Chargeable Income (d)
Statutory Total Income

Answer is B

Education Tax is charged 5% of the Assessable Income of Limited

Liability Companies.

96. Total Income less Statutory Deductions will amount ____________

(a) Total Income (b) Assessable Income (c) Earned Income (d) Charged
Income.

Answer is C

97. An Assessment & collection & Collection of Taxes from Market &
Women, Artisans, is done by ____________

(a) Informal Sector (b) TEET (c) Tax Stations (d) Public Sector.

Answer is A

Informal Sector - Tradesmen and Artisans Unit

a) Monitors the activities of craftsmen, or skilled manual workers e.g

 b) Educates and collect adequate tax from artisan sector of the
economy.

98. Work back and determine the Gross Income of N1,280,000 Tax Paid
____________

(a) N8,000,000 (b) N10,000,000 (c) N20,000,000 (d) N22,000,000

Answer is A

Tax Paid = N1,280,000

300,000 7 21,000

300,000 11 33,000

500,000 15 75,000

500,000 19 95,000

1,600,000 21 336,000

560,000

3,000,000 24 720,000

6,200,000 1,280,000

i.e 6,200,000 + 200,000

0.8 = N8,000,000

Note: Ass up all the Taxable Income Rate plus N200,000 and divided 0.8,
which is the 80% balance of the CRA’s 20% i.e Gross Income = N8,000,000.
Tax Paid = N1,280,000

99. The Right of Election under change of Acounting Date falls in the hands
of ___________

(a) Tax payers (b) Tax Authorities (c) Tax consultants (d) Tax
personnel.

Answer is B

The Tax Authority owns the Right of Election under the change of
Accounting by determining the Higher Assessable income between the O

100. In Partnership, Interest on Drawings is treated as ___________

(a) Allowable Expenses (b) disallowable expenses (c) Taxable income

(d) Non taxable income.
 Answer is C

In Partnership Deeds, partners agreed on certain percentage on loans,

drawings or takings made by partnership from the partnership are paid
back with interest. This interest are income to partnership business,
thereby becoming taxable.

101. Stamp Duties instruments includes the following except: (a) Agreement
(b) Lease (b) Drawings (c) Mortgages

Answer is C

v. Stampable instruments:

a. Certificate of Occupancy

b. Governor’s Consent

c. Deeds of agreement

d. Deeds of Mortgages

e. Power of Attorney

f. Memorandum of Understanding

g. Tenancy Agreement

102. Which Schedule of the Personal Income Tax Stipulates the Statutory
Deductions

(a) First Schedule (b) Second Schedule (c) Fifth Schedule (d) Sixth
Schedule.

Answer is D

PITAM Sixth Schedule stipulates Statutory Deductions;

 Consolidated Relief Allowance

 Contributory pension scheme
 Life assurance
 National Housing Fund + F692
 National Health Insurance Scheme
 Gratuity

103. Fine for obtaining Tax clearance through mis – representation, forgery
falsification is _________

(a) N5,000 (b) N10,000 (c) N50,000 (d) N20,000.

 Answer is C

104. Education Tax is an example of _____________

(a) Ad – Valorem Tax (b) Indirect Tax (c) Direct Tax (d) Presumptive
Tax.

Answer is C

Education Tax is paid directly by Limited Liability Companies.

105. The commencement of date for applying the new Personal Income Tax
(Amendment) Act is __________ (a) 11th June 2011 (b) 12th June 2011
(c) 13th June 2011 (d) 14th June 2011.

Answer is D

106. Individuals with N15,000,000 and above Income are Assessed by

__________ unit

(a) Strategic Audit Unit (b) High Net Worth Unit (c) Relationship
Management Unit (d) Personal Income Tax Department.

Answer is B

High Net Worth Individual Unit:

a. Assessment of high net work individuals based on life style, status,

and income earned.
b. Handle personal income Tax payment of High Net worth Individuals
(HNWI), via Direct Assessment.
c. Capture high net worth individual tax payer who are People of
influence, distinguished businessmen, successful professionals and
political exposed person within Lagos State.
d. Monitors their compliance, ensure adequate and prompt remittance of
all taxes.
e. Any other assignment as directed by the Chairman.

107. Refund of Medical Expenses is treated as ___________

(a) Allowable Expenses (b) Disallowable Expenses (c) Taxable Income

(d) Non Taxable Income.

Answer is C

108. Part C of the Form A of Lagos State Internal Revenue Service stipulates
___________
 (a) Personal Details (b) benefits in kind (c) statement of income
(d) claims for allowances.

Answer is B

109. Penalty payments is a form of ________ (a) Levies (b) Charge

(c) Taxation (d) Fines

Answer is D

Any Payments made to the Government for failing to adhere to Statutory

Regulations becomes Penal and Fines.

110. What form of Taxation has Franked Investment Incomes ___________

(a) Withholding Tax (b) Value Added Tax (c) Companies Income Tax
(d) Personal Income Tax.

Answer is A

Franked Investment Income includes Dividend and Interest are only

subjected to Withholding Tax.

111. Where a Franked Investment Income hasn’t suffered Tax is treated as

__________

(a) Non Taxable Income (b) Unearned Income (c) Taxable Income
(d) Earned Income

Answer is C

112. Interest on Loan granted to a Partner by the Partnership is treated as

________

(a) Allowable Expenses (b) Disallowable Expenses (c) Taxable Income

(d) Non-Taxable Income.

Answer is C

Loan granted to a Partner by the Partnership business is payable back

with interest to the lender, such interest becomes Taxable Income to the
Partnership business.

113. Abridged Form used by LIRS is a simplified version of ___________

(a) Form A (b) Form H (c) Form L1 (d) Form A1

Answer is A

114. The penalty for making incorrect returns is ___________

 (a) N10, 000 (b) N20, 000 (c) N50, 000 (d) N500, 000

Answer is B

115. One of the following business expenses is treated as allowable expenses

___________

(a) Depreciation (b) Rent Received (c) Debt Recovery (d) Defalcation by
Sales Boys.

Answer is D

Defalcation by Sales Boys is Allowable expenses but Embezzlement by

Senior Management staff is seen as Financial manipulation through his
position, which becomes Disallowable.

116. Interest paid by an individual on loan taken for Owner’s Occupier house
is treated as ___________

(a) Allowable Expenses (b) Disallowable Expenses (c) Taxable Income

(d) Non-taxable income.

Answer is A

Any Interest paid on loan taken to build an owner Occupier building

becomes Allowable. This is aimed at encouraging Individual Owner
Occupier.

117. Chief Animashaun bought some houses in 1999, and sold part in 2004,
He later sold the rest in 2010. What will be his Year(s) of Assessment
___________

(a) 1999 & 2010 (b) 2010 only (c) 2004 only (d) 2004 & 2010.

Answer is D

Capital Gains Tax are determine in the year the Asset(s) are disposed, on
Actual Year Basis.

118. Income received after the liquidation of a business is treated on

__________

(a) Preceding Year Basis (b) Actual Year Basis (c) Current Year Basis
(d) Carry Forward Basis.

Answer is B
 Any Income received or Expenses incurred after liquidation are deemed
to have occurred on the last day of the business and such incomes are
added to the Assessable Profit and such expenses deducted.

119. What is the Gross Income of N350,000 Tax paid ____________

(a) N3,000,000 (b) N4,000,000 (c) N5,000,000 (d) N6,000,000

Answer is A

Tax Paid = N350,000

300,000 7 21,000

300,000 11 33,000

500,000 15 75,000

500,000 19 95,000

600,000 21 126,000

2,200,000 350,000

2,200,000 + 200,000

0.8 = N3,000,000

Note: Add up all the Taxable Income Rate plus N200,000 and divided 0.8,
which is the 80% balance of the CRA’s 20% i.e Gross Income = N3,000,000.
Tax Paid = N350,000

120. In Capital Gains Tax, Sales Proceed less incidental expenses less cost of
Acquisition equals ___________

(a) Chargeable Profit (b) Taxation Profit (c) Assessable Gain

(d) Chargeable Gains

Answer is D

MARADE NIGERIA

COMPUTATION OF CAPITAL GAINS TAX PAYABLE FOR 2015

TAX YEAR

Sales Proceed xxxx

Deduct: Allowable Expenses:

Advertising Fee XX
 Professional Fee XX XXX

NET SALES PROCEED XXX

Deduct:

Cost of Acquisition XX

Add: Allowable Incidental Expenses

Cost of Renovation XX

Stamp Duties XX (XX)

121. Any expense recoverable under an Insurance or Contract of Indemnity is

treated as ____________

(a) Allowable Expenses (b) Disallowable Expenses (c) Taxable Income

(d) Non - Taxable Income.

Answer is B

122. Replacement of bulbs in government expenditure is regarded as _______

(a) Capital Expenditure (b) General Expenses (c) Allowable Expenses

(d) Recurrent Expenditure.

Answer is D

123. Marade Consult bought a block of 50 flats for N25,000,000 in 2015,

while incurring N2,400,000 on renovation. Part of the building was sold
for N18,000,000 in 2009, while the Market Value of the Unsold part is
N5,000,000. The unsold portion was later disposed for N15,500,000 after
paying incidental cost of N650,000 in 2014. What is Marade Consult Tax
Payable on their Chargeable Gains for 2014 Tax Year ____________

(a) N745,000 (b) N650,000 (c) N875,000 (d) N985,000.

Answer is D

MARADE NIGERIA

COMPUTATION OF CAPITAL GAINS TAX PAYABLE FOR 2014

TAX YEAR

Sales Proceed 15,500,000

Deduct: Allowable Expenses:

Renovation (650,000)
 NET SALES PROCEED 14,850,000

Deduct:

Cost of Acquisition (5,000,000)

Chargeable Gain/Loss 9,850,000

Capital Gains Tax Payable @ 10% N985,000

124. Total Assessable Income plus Balancing Charges less Balancing

Allowance less Capital Allowance less loss relief will equal
____________

(a) Total Income (b) Assessable Income (c) Earned Income

(d) Chargeable Income.

Answer is A

125. If N3,584,000 is paid as Tax, what will be the Gross Income _________

(a) N15,000,000 (b) N20,000,000 (c) N30,000,000 (d) N40,000,000

Answer is B

Tax Paid = N3,584,000

300,000 7 21,000

300,000 11 33,000

500,000 15 75,000

500,000 19 95,000

1,600,000 21 336,000

560,000

12,600,000 24 3,024,000

15,800,000 3,584,000

15,800,000 + 200,000

0.8 = N20,000,000

Note: Add up all the Taxable Income Rate plus N200,000 and divided
0.8, which is the 80% balance of the CRA’s 20%. i.e Gross Income =
N20,000,000. Tax Paid = N3,584,000
126. Section __________ of the Personal Income Tax spelt out the Functions
of State Boards.

(a) Section 8b (b) Section 8(1) (c) Section 9 (d) Section 10.

Answer is C

127. In Accounting Measurement of Income covers all of these except

___________

(a) Assessable Income (b) Revenue Income (c) Revenue Expenditure

(d) Capital Income.

Answer is A

MEASUREMENT OF INCOME

This is the process of using accounting rules – “Concepts and

Conventions” in arriving at conclusive decision on the legitimate income
and expenses to be included and charged in the profit and loss account.
These includes:

 Revenue Income – Revenue generated from the use of an asset by

other users
 Revenue Expenditure – Cost of maintenance, repair and other
recurrent expenses.
 Capital Income – Revenue from disposal of assets
 Capital Expenditure – Cost of erecting, building, constructing or
buying an asset.

128. Interest accruing to a person on foreign domiciliary accounts is treated as

___________

(a) Allowable Expenses (b) Disallowable Expenses (c) Taxable Income

(d) Non – Taxable Income.

Answer is D

129. Capital Gains Tax is govern by ___________

(a) Cap C1, LFN 2004 (b) Cap C21 LFN 2004 (c) Cap C8, 2004
(d) Cap C2, LFN 2004.

Answer is A

130. Withholding Tax Paid on any Franked Investment Income is claimable as

__________ (a) Tax Credit (b) Tax Relief (c) Tax Allowance (d) None
of the above.
 Answer is D

131. Service Incomes includes the following except _________

(a) management fees (b) consultancy fees (c) director’s fee

(d) Commission.

Answer is D

SERVICE INCOME

Director’s fee 10%

Consultancy fee 5%

Professional Fee 5%

Management Fee 5%

Technical Fee 5%

Commission 5%

Contract of Construction 5%

Contract Supplies 5%

132. Loan granted by a Partner for business purpose of the Partnership is

treated as ____________

(a) Allowable expenses (b) Disallowable expenses (c) taxable income

(d) Non – taxable income.

Answer is A

Loan taken either from Financial Institutions or Partner for the purpose of
the business wholly is deemed additional capital.’

133. According to the Personal Income Tax Act, State Government has
__________ number Taxes and Levies as collections.

(a) 25 Items (b) 35 Items (c) 27 Items (d) 40 Items.

Answer is A

As stated in the 2016 LIRS Diary.

134. Forms of Assessment includes the following except _________

(a) Tax Assessment (b) Administrative Assessment (c) Self Assessment

(d) Revised Assessment
 Answer is A

FORMS OF ASSESSMENT

Best of Judgment

Back Duty Assessment

Self Assessment, etc

135. Alahji Danladi’s Profit and Loss Account for the year ended 31st
December, 2010 revealed the following:

Income N

Gross Trading Profit 500,000

Profit on Sales of fixed Assets 20,000

Expenditure

Expansion of Storeroom 120,000

Bad Debts 50,000

Income Tax Provision 115,000

Salaries 100,000

Net profit 135,000

Calculate the Assessable Income of Alhaji Danladi for the relevant Year
of Assessment

(a) N420,000 (b) N345,000 (c) N402,000 (d) N354,000

Answer is A

Alhaji Danbata

Computation of Assessable Income

Net Profit 135,000

135. Bad Debts 50,000

Income Tax Provision 115,000

Salaries 100,000

Net Profit 135,000

 Calculate the Assessable Income of Alhaji Danladi for the relevant Year
of Assessment

(a) N420,000 (b) 345,000 (c) N402,000 (d) N354,000

Answer is A

Alhaji Danbata

Computation of Assessable Income

Net Profit 135,000

Add

Expansion 120,000

Income Tax 115,000 235,000 370,000

Less: Profit on sale of Asset (20,000)

Assessable Income 350,000

136. What is the formula applied in getting Gross Income in Withholding Tax
Computation __________

(a) Gross Income divided by WHRT Rate multiply by 100% (b) Net
Income divided WHT Rate multiply by 100% (c) WHT Rate divide by
Gross income multiply by 100% (d) WHT Rate divided by Net Income
multiply by 100%

Answer is A

GROSS INCOME X 100

WHT RATE - 100 1

137. The law for Wharf landing Fee was enacted in what year

(a) 2009 (b) 1999 (c) 2001 (d) 1991

Answer is A

138. The fees prescribed for Wharf Landing Fee shall be payable ________?
(a) Outside the seaport premises (b) based on the content in the container
(c) To the Nigeria Ports Authority (d) None of the above.

Answer is A