TSKJ, the construction contractors to the Nigeria LNG Limited, NLNG, has been ordered to pay N5.14 billion ($35,938,087) as tax liabilities to the Federal Inland Revenue Service, FIRS. by the Abuja division of the Tax Appeal Tribunal. The order specifically concerns TSKJ II, a multinational company and parent firm to TSKJ Nigeria Limited.
It follows an appeal by TSKJ II, challenging the FIRS Tax assessments in a contract for the construction of the Nigeria liquefied natural gas project. The assessment is for the period, 2006 to 2008. Acting Chairman of the Tribunal, Hon. Nnamdi Ibegbu (SAN), who issued the order, also awarded N300, 000 against TSKJ II as cost of the three appeals decided in favor of FIRS.
The company (TSKJ II) had filed three separate appeals with suits No TAT/ABJ/APP1010/2008, TAT/ABJ/APP/006/2006 and TAT/ABJ/APP/017/2010 before the tribunal.
In the appeal to the Tax Appeal Tribunal by TSKJ II against the FIRS assessment, the company challenged FIRS refusal to amend its assessments for 1997-2002 and additional assessment raised by the Service and 550, 556.74 dollars tax liabilities for 2008 and 2009 tax years, among others.
In the first ruling on the appeal of FIRS assessment for 1997-2002, the Tax Appeal Tribunal upheld FIRS assessment that TSKJN is to pay $ 16,688,267 dollars as tax. Also, in the ruling, the court upheld FIRS assessment of $ 19,249,820 million dollars. In trying to fulfill its tax obligations for the years in question, TSKJ II filed its tax returns, under Section 26 of Companies Income Tax, CITA, but made deductions on expenses incurred by its subsidiary, TSKJ Nigeria Limited, but, the FIRS scoffed at that. FIRS maintained that since TSKJ II did not file its audited accounts, but filed under Section 26 of CITA, deductions in favor of TSKJ Nigeria Limited were not allowable.