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.
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