The Excess Dividend Tax Conundrum

In 2013, Actis Africa (Nigeria) Limited (“the Appellant”) made profits and retained some of its earnings (after tax had been paid on the profits made). In contrast, no profits were made in the subsequent year, that is, 2014, as a result, no income tax was paid by the Appellant. In spite of this, the Board of Directors of the Appellant recommended that interim dividends of N49,095,020 (Forty-Nine Million, Ninety-Five Thousand and Twenty Naira) be declared to the shareholders of the company payable from the retained earnings of the company for the previous financial year.

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