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ICAN Taxation 2025 past questions and answers

This 2025 ICAN Taxation set has 20 practice questions. Try these 5 free sample questions, tap a question to reveal the answer and explanation. Then practise the whole 2025 set with instant marking.

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Sample ICAN Taxation 2025 questions

1. A Nigerian business owner wants to know in advance how much tax is due, when it must be paid and how it should be paid. Which principle of a sound tax system is most directly served by clearly specifying these matters?
  1. Economy
  2. Certainty
  3. Convenience
  4. Equity

Answer: B. Certainty

Certainty requires the amount, timing and manner of tax payment to be clear to the taxpayer. Convenience concerns how practical payment is, not whether the liability is predictable.

2. A Nigerian shop sells taxable goods to a customer, collects VAT as part of the price and accounts for it to the tax authority. The customer ultimately bears the tax cost. How is VAT classified in this scenario?
  1. An indirect tax
  2. A direct tax
  3. A capital allowance
  4. A withholding tax credit

Answer: A. An indirect tax

VAT is indirect because the supplier collects it from the customer and remits it, while the customer bears the economic burden. A direct tax is generally imposed directly on the income or profits of the person liable.

3. Ada is an individual resident in Enugu State throughout the year and earns employment income there. For this scenario, which authority administers her personal income tax under PITA?
  1. The Federal Inland Revenue Service
  2. The Nigeria Customs Service
  3. The Enugu State Internal Revenue Service
  4. The Corporate Affairs Commission

Answer: C. The Enugu State Internal Revenue Service

Personal income tax for a resident individual is administered by the relevant State Internal Revenue Service, here Enugu State's service. FIRS administers federal taxes such as company income tax.

4. A payroll clerk has determined an employee's chargeable income to be N400,000. Under the PITA bands stipulated here, the first N300,000 is taxed at 7% and the next N300,000 at 11%. What is the tax on this chargeable income using those bands?
  1. N28,000
  2. N30,000
  3. N44,000
  4. N32,000

Answer: D. N32,000

Tax is N300,000 × 7% = N21,000 plus N100,000 × 11% = N11,000, giving N32,000. Applying 11% to the entire N400,000 would incorrectly disregard the first band.

5. A Nigerian company computes its adjusted profit under CITA. It borrowed funds wholly for its trading operations and incurred interest on that borrowing. Assuming the interest is properly supported and not otherwise restricted, which treatment is appropriate?
  1. Deduct the business-related interest in computing taxable profit
  2. Add the interest back because all interest is non-deductible
  3. Treat the interest as a capital gain
  4. Deduct the interest only from VAT payable

Answer: A. Deduct the business-related interest in computing taxable profit

Interest on borrowing wholly used for the company's business is generally an allowable expense, subject to applicable restrictions. It is not a capital gain or a VAT credit.

More ICAN Taxation years

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All ICAN Taxation years · ICAN subjects

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