Nigeria: Tax Dispute - Tribunal Rules in Favour of MultiChoice

Multichoice Nigeria.
21 October 2021

The Lagos Zone of the Tax Appeal Tribunal (TAT) has ruled that MultiChoice Nigeria has fulfilled the conditions required for the hearing of its appeal against the N1.8 trillion tax bill slammed on it by the Federal Inland Revenue Service (FIRS).

MultiChoice had filed an appeal before TAT over perceived wrongful assessment spanning a 10-year period.

The tribunal Chairman, Prof A.B. Ahmed, according to a statement yesterday, had on August 24th, directed MultiChoice to make a statutory deposit of 50 per cent of the alleged tax liability before the continuation of the appeal.

At the hearing of the matter last month, the FIRS had objected to the continuation of the appeal on the ground that MultiChoice had failed to comply with the earlier directive of the tribunal

The FIRS argued that Paragraph 15(7) of the Fifth Schedule to the FIRS (Establishment) Act 2007 compels a taxpayer disputing its assessment to make a statutory payment of 50 per cent of the disputed sum before the tribunal could prosecute an appeal brought before it.

The revenue agency argued that in the absence of a proof of deposit, the tribunal should discontinue hearing of the appeal and enter judgment against MultiChoice.

MultiChoice, however, stated that it has complied, as the referenced section of the FIRS Act does not compel it to pay N900 billion, but an amount equal to its tax in the preceding year of assessment or one half of the disputed tax assessment under appeal, whichever is the lesser amount plus 10 percent.

MultiChoice further stated that in fulfillment of the condition and demonstration of good faith, it deposited N10 billion with the FIRS, pending the determination of the actual tax liability, if any.

Delivering ruling on the objection raised by FIRS the tribunal held: "It 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. The appellant has complied with the orders of this tribunal given on August 24, 2021 and is therefore entitled to be heard on merit. It is hereby directed that this matter proceeds to hearing."

Ruling on other issues raised by the FIRS, the Tribunal held: "We have carefully examined the submission of both counsels and we are of the understanding that this tribunal has been called upon to give a ruling on the proper legal interpretation of the relevant sections of provisions of paragraph 15 of FIRS Establishment Act 2017 based on which the orders of this Tribunal of August 24, 2021 was made.

"It is our understanding that one of the major functions of this tribunal is to interpret and outline tax laws in specific cases that will come before it. In doing this duty, we will be guided by Superior Courts of Record.

"In a plethora of cases, the courts have often held that in the interpretation of provisions of the law, the court must give meaning to the exact word used by the makers of the law without adding or subtraction. The tribunal is to declare what the law is and not what it ought to be.

"This tribunal is unable to agree with the argument presented by the respondent's counsel because the said portion of the paragraph in the FIRS talks about the 'preceding year' and not 'preceding years.'

"The paragraph under the portion of the FIRS in reference also talks about assessment and not assessments. This tribunal cannot reduce anything from the paragraph as intended by the makers of the law. The paragraph under consideration also talks about 'assessment' and not 'assessments' therefore this tribunal will not add or reduce anything from the said paragraph," the TAT ruled.

It concluded by fixing 17 November for the commencement of the hearing of the appeal.

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