<\/p>\n\n\n\n
By Bashir Oyintiloye<\/p>\n\n\n\n
Over the last three months, the Tax Appeal Tribunal (TAT) has been among the headlines, notably for the tax disputes between pay television service provider, MultiChoice Nigeria, its parent company, MultiChoice Africa Holdings and the Federal Inland Revenue Service (FIRS). It is a safe bet that the TAT has the attention of the business and investment communities locked on it, as it carries enormous implications.<\/p>\n\n\n\n
It is unlikely to be otherwise, particularly with the wildly different rulings it delivered in very similar matters it ruled on. The most recent, delivered in Abuja on 26 October, saw the tribunal dismiss the appeal of MultiChoice Africa Holdings against an alleged $342million Value Added Tax bill given to it by the FIRS.<\/p>\n\n\n\n
The TAT, in delivering its ruling, upheld the objection of the FIRS to the appeal of MultiChoice Africa Holdings, stating that the company had neglected to comply with Order 3 Rule 6 of the TAT (Procedure) Rules, 2021, which were issued by the Minister of Finance, Mrs. Shamsuna Zainab Ahmed in June but did not become public knowledge until late in September.<\/p>\n\n\n\n
Order 3 Rule 6 of the new TAT rules requires an appellant to pay half of the disputed assessment as security deposit before it could file an appeal before the tribunal. It also requires the appellant to file an affidavit verifying the payment, which TAT also ruled that MultiChoice Africa Holdings failed to comply with.<\/p>\n\n\n\n
Curiously, a week before, the TAT, sitting in Lagos, in the appeal filed by MultiChoice Nigeria, had ruled in favour of the appellant, dismissing the FIRS\u2019 objection to the continuation of the appeal. The Nigerian subsidiary had filed an appeal against an alleged tax liability of N1.8 trillion issued to it by the FIRS. On 24 August, the tribunal, relying on Paragraph 15 (7) Fifth Schedule of the FIRS Establishment Act, directed MultiChoice Nigeria to pay a security deposit for its appeal to be heard. The FIRS interpreted the ruling to mean that MultiChoice Nigeria should pay N900 billion, 50 per cent of the disputed assessment, for the appeal to be heard.<\/p>\n\n\n\n
At the resumed hearing of the matter on 23 September, MultiChoice Nigeria argued that it had complied with the tribunal\u2019s ruling and Paragraph 15 (7) of the FIRS Act via the payment of N8 billion in two tranches.<\/p>\n\n\n\n
Paragraph 15(7) of the FIRS Act gives the tribunal power to direct an appellant, in certain circumstances, to make a security deposit for the continuation of an appeal. pay 50 percent of the tax paid the previous year plus 10 percent mark-up as security before prosecuting an appeal.<\/p>\n\n\n\n
The FIRS, however, urged the TAT to discontinue the hearing of the appeal and rule against the company if it failed to show proof of full compliance with the directive to pay N900 billion, 50 percent of the N1.8 trillion tax assessment, for the years under review.<\/p>\n\n\n\n
The TAT adjourned till 20 October and on the day, it dismissed the FIRS\u2019 objection to the appeal.<\/p>\n\n\n\n
\u201cIt is obvious that the appellant has not only complied with the orders of this court but has also provided sufficient evidence before this tribunal that they are credible and ready to pursue this matter with all sense of responsibility and seriousness. It is only fair and just that they be given the privilege to do so,\u201d ruled the tribunal.<\/p>\n\n\n\n
The tribunal also disagreed with the FIRS that MultiChoice Nigeria was required to pay half of the assessment for all the years under review, ruling that the FIRS Act explicitly says the \u201cpreceding year\u201d, not \u201cyears.\u201d<\/p>\n\n\n\n
I have found it mystifying, dangerous even, that the tribunal sang from different hymn sheets, relying on the new TAT rules for one ruling and the FIRS Act for the other. As tax and legal experts have pointed out, the new TAT rules-a body of subsidiary legislations-cannot override the provisions of an act. The blanket 50 per cent payment prescribed by the new tax tribunal procedures are inconsistent with the FIRS Act, which lists the conditions under which a directive on deposit may be issued. The tribunal, states the section, may direct the payment of security deposit if the FIRS proves that an appellant has, for the year of assessment, failed to file returns or deems the appeal an abuse of the appeal process or it is expedient to require the appellant to pay an amount as security for prosecuting the appeal.<\/p>\n\n\n\n
If any of these conditions is present, the section states that the tribunal may adjourn the hearing and order the appellant to deposit with the FIRS an amount \u201con account of the tax charged by the assessment under appeal, equal to the tax charged upon the appellant for the preceding year of assessment or one half of the tax charged by the assessment under appeal, whichever is the lesser plus a sum equal to ten percent of the said deposit\u201d.<\/p>\n\n\n\n
Former Permanent Secretary and Solicitor-General, Lagos State Ministry of Justice, Mr. Lawal Pedro (SAN), was quoted in the media as describing Order 3 Rule 6 as akin to a forced admission of liability before actual adjudication of the dispute.<\/p>\n\n\n\n
\u201cThis will amount to forced admission of liability before adjudication of dispute contrary to our justice system of fair hearing and equality before the law,\u201d he said.<\/p>\n\n\n\n
Chairman, Nigeria Bar Association Section on Public Interest and Development Law (NBA-SPIDEL) Mr. Monday Ubani, expressed similar sentiments, saying the new rules are at variance with the grain of rationality and the country\u2019s legal jurisprudence.<\/p>\n\n\n\n
\u201cIt is an affront to the rights of fair hearing and access to justice guaranteed by the constitution of Nigeria. I have personally written to the Minister of Finance over this issue and highlighted the dangers of the Rules, which are capable of stifling businesses and sending a wrong signal to prospective investors,\u201d Ubani stated.<\/p>\n\n\n\n
The glaring inconsistency of the tribunal\u2019s last ruling with the substantive legislation is a curious one. In addition to being unjust, it also carries the potential to injure the economic well-being of the country. The new tribunal rules effectively empower tax authorities to come up with whimsical assessments and prevent the taxpayer from appealing. The latter will create cash flow problems for businesses, suffocating them, and making the country\u2019s investment environment unappealing to domestic and foreign investors.<\/p>\n\n\n\n
Oyintiloye, investor and public commentator, writes from Ibadan<\/em><\/p>\n\n\n\n Originally published at Thisday<\/em><\/p>\n","protected":false},"excerpt":{"rendered":" By Bashir Oyintiloye Over the last three months, the Tax Appeal Tribunal (TAT) has been among the headlines, notably for the tax disputes between pay television service provider, MultiChoice Nigeria, its parent company, MultiChoice Africa…<\/p>\n","protected":false},"author":1,"featured_media":5856,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_jetpack_memberships_contains_paid_content":false,"footnotes":"","jetpack_publicize_message":"","jetpack_publicize_feature_enabled":true,"jetpack_social_post_already_shared":true,"jetpack_social_options":{"image_generator_settings":{"template":"highway","enabled":false},"version":2}},"categories":[9,4],"tags":[1790,1924,1925],"class_list":["post-5853","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-business","category-polity-politics-governance","tag-firs","tag-multichoice","tag-tax-tribunal"],"jetpack_publicize_connections":[],"yoast_head":"\n