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(1) Where an individual incurs expenditure in respect of that individual, the expenditure is domestic expenditure to the extent that it is incurred

(a) in maintaining the individual, including the provision of shelter, meals, refreshment, entertainment or other leisure activities;

(b) by the individual in commuting from home;

(c) in acquiring clothing for the individual, other than clothing that is not suitable for wearing outside of work; or

(d) in educating the individual, other than education that is directly relevant to a business conducted by the individual and that does not lead to a degree or diploma.

(2) Where another person incurs expenditure in making a payment to or providing any other benefit for an individual, the expenditure is domestic expenditure except to the extent that

(a) the payment or benefit is included in the calculation of the income of the individual;

(b) the individual provides consideration of an equal market value for the payment or benefit; or

(c) the amount of the expenditure is so small as to make it unreasonable or administratively impracticable to account for.

(3) Expenditures referred to in subsections (1) and (2) include interest incurred on the amount borrowed that is used in a manner referred to in subsections (1) and (2).

(4) For the purposes of this Act, unless the context otherwise requires

“excluded expenditure” means

(a) tax payable under this Act;

(b) bribes and expenditure incurred in corrupt practices;

(c) interest, penalties and fines paid or payable to a government or a political subdivision of a government of any country for breach of any legislation;

(d) expenditure to the extent incurred by a person in deriving exempt amounts or final withholding payments;

(e) retirement contributions, unless they are included in calculating the income of an employee under section 4(2)(a)(vi);

(f) dividends of a company;

(g) depreciation of a fixed asset. [Inserted by the Income Tax (Amendment) (No.2) Act, 2016 (Act 924)]