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.