Upkeep Allowance Not Taxable, Says Oyedele

C Chairman of the Presidential Committee on Fiscal Policy and Tax Reforms, Taiwo Oyedele, has clarified that money given as upkeep or gifts does not attract tax in Nigeria.

Speaking on tax obligations, Oyedele explained that such support — whether sent to a relative, friend, or even a stranger — is considered a non-exchange transaction and therefore not taxable.

“You earn a certain amount of money and you have to send upkeep to your cousin, your brother, even a stranger. It doesn’t really matter. If the amount you’re sending is money you are giving to them for how they are spending, it’s not because they have done something for you, right? So it’s a gift. We call it a non-exchange transaction,” he said.

According to him, the responsibility lies with the giver to have already paid tax on their income before extending such financial support.

However, Oyedele stressed that once money is earned through the provision of goods or services, it automatically becomes taxable — regardless of whether the activity is lawful or not.

“One thing about tax law is that it does not separate whether what you are doing is legitimate or not. It doesn’t even ask you. It just asks whether you have an income. Did you get it from rendering a service or providing a good? You pay tax,” he noted.

The clarification comes amid growing public debate on what constitutes taxable income in the country.

Source: X | TheCable