Tax Appeal Tribunal Sets Aside Akwa Ibom Internal Revenue Service N7b Tax Request From Oil Firm

The South-South Zone of the Tax Appeal Tribunal has set aside Akwa Ibom State Internal Revenue Service demand tax notice of the sum of N7,285,718,633.71 (Seven Billion, Two Hundred and Eighty-Five Million, Seven Hundred and Eighteen Thousand, Six Hundred and Thirty-Three Naira, Seventy One Kobo) purported tax debt arising in the period 2009 to 2015 from Elper Oilfield Engineering Nig Ltd for being arbitrary.

The panel held that the appellant has substantially proved his case on the balance of probability and the scale of justice preponderates to a large extent that the Demand Notice was not factual, rather fictitious and arbitrary.

On the appellant claim for the refund of the sum of N11,705,619.07 (Eleven Million, Seven Hundred and Five Thousand and Six Hundred and Nineteen Naira, Seven Kobo only) acclaimed excess of due taxes remitted to the Respondent, the tribunal held that the panel was not furnished with the actual payments receipts to confirm the veracity of the overpayment claimed.

From facts, the appellant- Elper Oilfield Engineering Nig Ltd had submitted that the Respondent has arbitrarily and unlawfully demanded the sum of N7,285,718,633.71 (Seven Billion, Two Hundred and Eighty-Five Million, Seven Hundred and Eighteen Thousand, Six Hundred and Thirty-Three Naira, Seventy One Kobo), as tax debt arising in the period 2009 to 2015, from disputed obligations towards the Respondent.

The appellant continued that the Respondent- has incorrectly assessed the 26 Taxable Employees to income tax at a flat rate of 25% for the period 2009 to 2010 and 24% for the period 2011 to 2015.

In defense, the Respondent- Akwa Ibom State Internal Revenue Service stated that it did not impose an arbitrary and unjustified assessment on the Appellant and its actions were done in accordance with the provisions of the Personal Income Tax Act.

The Respondent noted with dissatisfaction, the recurring cases of non-disclosure of the Appellant’s actual project workforce in the state where the Appellant predominantly derives its revenue, urged the court to dismiss the appellant claim and to order the Appellant to pay the additional tax of N7,285,718,633.71 (Seven Billion, Two Hundred and Eighty-Five Million, Seven Hundred and Eighteen Thousand, Six Hundred and Thirty-Three Naira, Seventy One Kobo) as Tax due having become final and conclusive.

Delivering the judgment, at a panel led by Prof Obehi Odiase-Alegimenlen as chairman and Dr. David Ala-Peters, Mrs. Hilda Ofure Ozoh, Mr. Vitalis Friday Ajoku, and Prof. Olatunde Julius Otusanya as members expunged the respondent amended statements on oath along with the exhibits tendered for being “fundamentally defective” and incompetent.

The tribunal further held that some expatriates’ names which the Respondents included as Resident in Akwa Ibom in the computations in the Demand Notice were residents in Lagos and all the names stated in the Exhibit do not qualify as itinerant workers.