Tax Appeal Tribunal sets aside Anambra Internal Revenue's N1.3b Tax Liability Assessment on MTN Nigeria

• Thursday 15th September 2022

The Enugu Division of The Tax Appeal Tribunal has set aside the sum of N1,310,681,786.30 (One Billion, Three Hundred and Ten Million, Six Hundred and Eighty-One Thousand, Seven Hundred and Eighty-Six Naira, Thirty Kobo)  Withholding Tax (WHT) assessment issued on MTN Nigeria Communications Limited by Anambra State Internal Revenue Service for lacking merit.

The Tribunal panel headed by Hon. Chukwuemeka Eze held that the additional assessment made by Anambra State Internal Revenue Service on MTN for the period of 2001 – 2014 was erroneous and speculative figures.

The Tribunal enjoined Anambra State Internal Revenue Service to conform its assessment within the provisions of law as any assessment without basis in law, no matter how fancy it may appear, will be rendered invalid.

From facts, the Appellant- MTN Nigeria had submitted that the Anambra State Internal Revenue Service requested that it resubmit documents and information required for a Tax Audit for the period 2001 – 2014, that it responded by providing the required documentation that established that a Tax Audit had been carried out for the period of 2001 – 2013, that it was not indebted and had discharged its Tax obligations.

The Company further averred that the calculated Demand of Notice assessment was later reduced to N130,311,903.51 without any reason, that the records which it had provided to aid the Tax Audit were not considered, and maintained that the Revenue agency assessment is wrongful and wholly unsupported by the law, urged the tribunal to grant the reliefs sought.

In defense, the respondent- Anambra State Internal Revenue Service maintained that the Appellant failed and neglected to provide evidence of conduction of Tax Audit for the periods under review and that all the Demand Notices served on the firm are not arbitrary and are within the law based on the information provided by the Appellant.

The Respondent urged the Honorable Tribunal to strike out its name as it is not the proper person the action should be brought against, that it is just the operational arm of Anambra State Board of Internal Revenue and therefore not a juristic person that can sue or be sued; and urge the tribunal to order the Appellant to pay its outstanding WHT liability of N130,311,903.51 on its 489 BTS sites in Anambra State forthwith and not 251 BTS sites as alleged.

In a well-considered judgment, the tribunal led by Hon. Barr. Chukwuemeka Eze as Chairman, Hon. Ide Udeagbala, Hon. Anne Akwiwu, Hon. Prof. J.O.  Anyaduba and Hon. Obri Ogar as members ruled that the withholding tax liability issued on MTN by ASIRS is faulty.

The tribunal further held that the basis for the Anambra State Board of Internal Revenue's additional assessment on MTN Nigeria Communications is not tenable and had failed woefully to ascertain the number of BTS sites upon which the Final Demand Notice dated September 26th, 2016 was based.

“Notwithstanding the power of the Respondent to make an assessment or assessment based on Best of Judgment (BOJ) or additional assessment as provided in sections 54 and 55 of PITA 2011 respectively on the Appellant, the former is enjoined to conform its assessment with the provisions of law as any assessment without basis in law, no matter as fancy it may appear, it will be rendered invalid.” Tribunal ruled

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