In general, expenses are deductible if they are incurred exclusively in the production of gross income and they are not of a capital or private nature. Expenses are not deductible to the extent that they are incurred in the production of exempt income.
Allowable deductions comprise of:
- Annual and investment allowances on fixed assets.
- Additional investment allowance for manufacturing companies on capital expenditure incurred on the acquisition of states-of-art technology equipment.
- Marketing and promotional expenses.
- Losses incurred in the production of gross income.
- Bad debts and irrecoverable sums.
- Pre-operational expenses of tax incentive companies.
- Donations to charitable institutions.
- Contributions to superannuation fund and employees' share scheme.
- Gains on profits derived from sale of units and securities.
- Expenses incurred in setting up social infrastructure.
- Contribution to the national ambulance services.
- Interest on bonds issued by statutory bodies and debentures issued by companies cultivating sugar cane or manufacturing sugar.