The Tax Appeal Tribunal in Abuja has ruled that the Cement Technology Institute of Nigeria (CTIN) must pay a tax assessment of N2bn to the Nigeria Revenue Service. This decision was made in a judgment on an appeal filed by the Institute, marked TAT/ABJ/332/2023. The CTIN had initially filed the suit on September 7, 2023, in response to a notice of additional assessment and demand notes for various taxes.
The taxes in question include Companies Income Tax, Education Tax, and withholding tax for the years of assessment from 2018 to 2020 and years of account from 2017 to 2019. The Institute had also contested the charge on Companies Income Tax and Education Tax on interest income earned from Treasury Bills, Bonds, and Fixed Deposit placements, arguing that it was unlawful. Furthermore, they argued against the withholding tax charged on management fees paid to the Bank of Industry.
The tribunal panel formulated four key issues to resolve the dispute. These included determining whether trade or business income is synonymous with taxable profit and examining the Companies Income Tax (exemption of bonds and short-term government securities) order of 2011. After considering the arguments presented, the tribunal dismissed the appeal.
The tribunal's decision included a computation of the taxes payable by the Institute. It was determined that the Companies Income Tax payable by the CTIN is N1,835,484,959.69, while the Tertiary Education Tax payable is N190,158,410.44. The tribunal also instructed the respondent to recompute the assessment within 30 days.
The recomputation is to give effect to the exemption of interest income specifically traceable to Federal Government Treasury Bills and Bonds under the Companies Income Tax (Exemption of Bonds and Short-Term Government Securities) Order, 2011. This aspect of the ruling aims to provide clarity on the tax exemptions applicable to certain government securities.
The judgment was delivered by a five-member panel of the Tax Appeal Tribunal. The panel's decision is binding on both parties involved in the appeal. The CTIN had approached the tribunal seeking redress on the disputed tax assessments.
The outcome of this case has implications for other institutions and businesses in Nigeria regarding their tax obligations and exemptions. The ruling underscores the importance of understanding the tax laws and regulations, particularly those related to exemptions on government securities.
Key points
- The Tax Appeal Tribunal has ordered the Cement Technology Institute of Nigeria to pay a tax bill of N2bn to the Nigeria Revenue Service.
- The tribunal ruled that the Institute's income from Treasury Bills, Bonds, and Fixed Deposit placements is subject to tax exemptions under certain conditions.
- The decision aims to clarify tax obligations and exemptions for businesses and institutions in Nigeria.
