- 5 Marks
Question
Mr. Abass works with the Federal Ministry of Works, Abuja. He lives in a self-contained flat in Gwagwalada and travels every weekend to see his first wife and children in Kaduna. He also visits and stays with his second wife and children in Nyanya, Nassarawa State on Thursdays and Fridays of every week.
Required:
Determine the tax authority to which Mr. Abass would be liable to tax in any year of assessment.
Answer
Where an individual has more than one place of residence in the relevant tax year, a principal place of residence would have to be determined for the purpose of identifying the tax authority to which such individual will be liable to pay tax.
A principal place of residence in relation to an individual with two or more places of residence on a relevant day, not being both within any one territory with earned income other than pension is:
(i) The State where he normally resides;
(ii) The State or place nearest to his place of work; and
(iii) The State where the income is derived. If the income is derived from more than one State, then the Federal Capital Territory.
Based on the above, Mr. Abass stays more days in Gwagwalada (Abuja) where he works and resides than either Kaduna or Nasarawa States. Consequently, he would be liable to pay tax on his income to the Federal Inland Revenue Service/Federal Capital Territory Internal Revenue Service
- Topic: Personal Income Tax
- Series: NOV 2015
- Uploader: Kwame Aikins