By Merit Ibe
The Centre for the Promotion of Private Enterprise (CPPE), has requested that the Finance Minister reviews the recent provisions to Tax Appeal Tribunal rule compelling those who have tax disputes to pay 50 percent of the amount in dispute before their appeal can be heard.
The Chief Executive Officer, Dr Muda Yusuf, made the appeal at the maiden press conference on “The Economy and Business Environment in 2021; An Agenda For 2022,” where he submitted that the rule was contrary to the principle of natural justice and constitutes an obstruction to fair hearing.
Making a case for a review, Yusuf observed that besides, the rule was in conflict with the Federal Inland Revenue Service (FIRS) Establishment Act that setup the tribunal, request that the rule be expunged from the proceedings of the tax appeal tribunals in the interest of fair hearing.
Commending the government for proposing the removal of the 0.25 per cent of turnover levy imposed on companies for NASENI (National Science and Engineering Institute) levy, the CEO noted that new taxes were being frequently added to the myriad of taxes on the already over-burdened private sector. “These include the Education Tax, Information Technology tax, Police Fund levy and the Tertiary Healthcare Fund levy recently passed by NASS among others.”
He said these were adding to the burden of dealing with multiple tax agencies from FIRS to states’ IRS, Customs, etc all trying to collect revenue and conduct tax audits,saying these taxes should be harmonised.
Meanwhile, the case of the MultiChoice Nigeria, pay-TV operator accused of a N1.8 trillion (€289m) tax fraud by the FIRS is a typical example that has elicited arguments.
The allegation says that MultiChoice has persistently breached all agreements and undertakings with FIRS.
Consequently, FIRS has ordered local banks to freeze the broadcaster’s accounts.
Tax Appeal Tribunal (TAT) had ruled that MultiChoice, must pay an immediate 50 per cent of the N1.8 trillion.
Multichoice insists that it is not in default of its tax obligations to Nigeria. The company 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 fulfilment 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.
Many contend that the law that demands that a tax appellant must deposit half of the assessed sum, plus 10 per cent, before its appeal could be entertained, is tough.
It will not spur the ease of doing business in Nigeria.
The economy is not in good stead due to insecurity, pandemic and others that have forcefully shut investments and also forced government into massive borrowing. However, the cure for this reality is not to over-tax businesses that still believe in Nigeria, as doing so will mean asking them to close shop.