The claim by the Federal Inland Revenue Service (FIRS) that the Tax Appeal Tribunal (TAT) has ordered MultiChoice Nigeria to pay N900bn, the equivalent of 50 per cent of the N1.8trn it is alleged to owe in taxes before dispute over the figures could be heard by the TAT is incorrect and incompatible with the provisions of FIRS Establishment Act the service said it relied on.
A statement by Multichoice addressing the act and proceedings of the Tax Appeal Tribunal which sat on Tuesday said the earlier statement by the FIRS is wrong and misleading.
“MultiChoice Nigeria has noted today’s media statement on the Tax Appeal Tribunal (“TAT”) appeal hearing held on 24 August 2021.
“The direction issued by the TAT does not compel MultiChoice Nigeria to make payment of 50% of N1,8 Trillion, being half of the disputed tax assessment which is under appeal.”
“The direction issued by the TAT in accordance with paragraph 15(7) of the Fifth Schedule to the FIRS Establishment Act requires MultiChoice Nigeria to deposit with FIRS an amount equal to the tax paid by MultiChoice Nigeria in the preceding year of assessment OR one half of the disputed tax assessment under appeal, whichever is the lesser amount plus 10%. The lesser amount is the tax paid by MultiChoice Nigeria in the previous assessed year which is substantially less than the disputed assessment.”
“MultiChoice Nigeria is a law-abiding corporate citizen and continues to engage constructively with FIRS in an attempt to resolve this matter.”
The FIRS had released a statement on Wednesday, stating that the TAT, relying on Paragraph 15 (7) of the Fifth Schedule of the FIRS Act, 2007, “requires all persons or companies seeking to contest a tax assessment to pay all or a stipulated percentage of the tax before it can be allowed to argue their appeal at contesting the assessment of at TAT”.
The referenced provision, however, declines to support the claim of the FIRS. The section provides that an appellant is required to deposit, as security, an amount on the account of the tax charged to it with the FIRS before the day of the adjourned hearing. The amount, according to the act, is the lesser between the tax charged upon the appellant for the preceding year of assessment or one half of the tax charged by the assessment and 10 percent of the said deposit.
Paragraph 15 (7) of the FIRS Act states: “At the hearing of any appeal if the representative of the Service proves to the satisfaction of the Tribunal hearing the appeal in the first instance that (a) the appellant has for the year of assessment concerned, failed to prepare and deliver to the Service returns required to be furnished under the relevant provisions of the tax laws mentioned in paragraph 11; (b) the appeal is frivolous or vexatious or is an abuse of the appeal process; or
(c) it is expedient to require the appellant to pay an amount as security for prosecuting the appeal, the Tribunal may adjourn the hearing of the appeal to any subsequent day and order the appellant to deposit with the Service, before the day of the adjourned hearing, an amount, on 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.”
By the foregoing, it is impossible to draw an inference that the ruling of the TAT is for MultiChoice Nigeria to pay half of the disputed sum, as the FIRS has claimed.