Only the official exchange rate published by the Central Bank of Nigeria (CBN) can be used when calculating deductible expenses. Using the parallel market rate is not allowed for tax purposes.
- Scenario: Your company needs to pay a foreign supplier 10,000. You buy the dollars at the parallel market rate of ₦1,500/, costing you ₦15 million. However, if the official CBN rate on that day is ₦900/$, you can only claim a tax deduction of ₦9 million, not the ₦15 million you actually spent.
