Ican 2021 Advanced Taxation Question 2

The quest for economic development in every sector of the country has enabled the Federal Government to come up with various tax incentives, especially for pioneer companies. Nature Agricultural Products Limited, a medium-sized company, was incorporated on January 10, 2015, as a manufacturer of animal feeds. The company thereafter applied for a pioneer status and was granted a pioneer certificate with a production day of March 1, 2015. The following details were provided in respect of business operations of the company: N (i) Net profit for the year ended February 28, 2019 15,350,000 The above net profit was arrived at after charging the following: Depreciation 1,725,000 Legal charges for purchase of leasehold rights 1,500,000 Loss on revaluation of plantation 2,104,000 Fines for traffic offence 70,000 Expenses on increase in share capital 1,201,000 (ii.) Capital expenditure incurred on or before February 28, 2018: (iii) Accumulated profit as at February 28, 2018 N3,968,000 The management of the company did not apply for extension of the pioneer period.