Tribunal orders institute to pay NRS N2 bn assessment tax

The Tax Appeal Tribunal on Thursday in Abuja ordered the Cement Technology Institute of Nigeria (CTIN)  to pay the Nigeria Revenue Service (NRS) known before as( FIRS) assessment tax of N2 billion.

The five-member panel gave the order in its judgment on Appeal marked TAT/ABJ/332/2023 filed by the Institute made this order

The members of the panel are Chief Moremi Soyinka-Onijala, Anthony Amoman, Dr Chukwudi Ezeudeka, Dr Gbenga Falana and Amina Ibrahim.

The CTIN filled the suit on Sept 7, 2023 on notice of additional assessment and demand notes for companies income tax.

Others are Education Tax and withholding tax for 2018 to 2020 years of assessment, 2017 to 2019 years of account and notice of refusal to amend, dated Sept. 2023.

The Institute also contended that the purported charge on Companies income tax and education tax on interest income earned on its Treasury Bills, Bonds and Fixed Deposit placements are unlawful, null and void and inconsistent with the provisions of the law.

The appellant also contended that withholding tax charged on the management fees paid to the bank of Industry are unlawful.

In resolution of the issues, the panel formulated four issues, as trade or business, income is not the same as taxable profit, secondly, companies income tax(exemption of bonds and short-term government securities) order, 2011.

Other issues are education tax and fourthly, withholding tax.

Delivering the judgment, Soyinka-Onijala held that having duly considered the statutory duties and obligations of all parties involved in the transaction giving rise to this appeal;

“The Tribunal hereby recomputes the Company Income Tax and Tertiary Education Tax payable by the Appellant.

“In carrying out the recomputation, the Tribunal allowed as a deductable expense the management fees paid by the Appellant to the Bank of Industry and accordingly deducted the said fees from the interest income in order to arrive at the revised assessable profit and total profit.

“The Tribunal further noted that, pursuant to the provisions of CITA the Bank of Industry is required to deduct Withholding Tax at the applicable rate of 10 per cent from the interest income at source be remitted to the Respondent.

“Due credit has therefore been given for the withholding tax so deducted in determining the Appellant’s final CIT liability.

“Consequently, the Tribunal finds that the Companies Income Tax payable by the Appellant is N1,835,484,959.69 while the Tertiary Education Tax payable is N190,158,410.44,” the tribunal held

On the whole, the tribunal held that for the reasons given above, this appeal fails and is hereby dismissed, save to the limited extent set out below.

The held that the respondent should within 30 days, recompute the assessment to give effect to the exemption of interest income specifically traceable to Federal Government Treasury Bills and Bonds under the Companies Income Tax (Exemption of Bonds and Short-Term Government Securities) Order, 2011.