How are expenses managed in Nigeria?

At Horizons, ensuring a smooth and transparent expense reimbursement process is essential for our team members.

In Nigeria, the taxation of expenses hinges on whether the expenses are directly related to business activities. It's important to differentiate between reimbursable expenses and expenses that are considered taxable benefits:

• Reimbursable Expenses: These are not taxed, as they are directly related to the business activities and are considered necessary for the performance of an employee's duties.
• Taxable Benefits: Expenses that confer a personal benefit to an employee (such as personal travel expenses or non-business-related meals) may be taxable under Nigerian law.

Accurate records of all expenses must be kept to clearly demonstrate their nature in case of audits by tax authorities.

Proper documentation is key to managing expenses effectively. In Nigeria, the following information needs to be clearly indicated on all receipts and invoices to ensure they are acceptable for both accounting and tax purposes:

• Date of Transaction: The exact date when the expense was incurred.
• Detailed Description: A clear description of the goods or services purchased. This description must be detailed enough to verify that the expense is business-related.
• Amount and Currency: The total amount spent and the currency used.
• Supplier Details: Information about the supplier including their name and contact details.
• Tax Information: If applicable, the VAT amount and the supplier's VAT registration number should be included. This is crucial for businesses to claim VAT credits.

Good to know

To review how to submit an expense and/or an expense report on the Horizons platform, take a look at this separate article:
How to submit expenses? : Horizons Help Center (joinhorizons.com)

To review how to appove an expense and/or an expense report on the Horizons platoform, take a look here:
How do I approve an expenses report? : Horizons Help Center (joinhorizons.com)