The Tax Appeal Tribunal, Abuja Zone, has ruled that the Cement Technology Institute of Nigeria (CTIN) must pay approximately N2.03 billion in taxes. The institute had disputed tax assessments issued by the Nigeria Revenue Service, formerly known as the Federal Inland Revenue Service. The tribunal, chaired by Chief Moremi Soyinka-Onijala, made the decision while passing judgment in an appeal filed by CTIN.
The dispute arose from CTIN's contention that assessments of Companies Income Tax and Education Tax on interest income derived from Treasury Bills, bonds, and fixed-deposit placements were unlawful. The institute also argued that Withholding Tax assessed on management fees paid to the Bank of Industry was unlawful. The tribunal considered four major issues, including whether CTIN's activities constituted trade or business and the applicability of the Companies Income Tax (Exemption of Bonds and Short-Term Government Securities) Order, 2011.
The tribunal recomputed the Companies Income Tax and Tertiary Education Tax payable by CTIN. It declared that management fees paid to the Bank of Industry should be allowed as a deductible expense and deducted from interest income. The tribunal also ruled that the Bank of Industry was required to deduct Withholding Tax at a 10% rate from relevant interest income and remit it to the tax authority.
The tribunal determined that CTIN's Companies Income Tax liability was N1,835,484,959.69 and Tertiary Education Tax liability was N190,158,410.44. The combined assessment totaled N2,025,643,370.13. The tribunal dismissed CTIN's appeal, except to a limited extent allowed in its judgment.
The tribunal directed the tax authority to recompute the assessment within 30 days to give effect to the exemption of interest income from Federal Government Treasury Bills and Bonds. This exemption is under the Companies Income Tax (Exemption of Bonds and Short-Term Government Securities) Order, 2011.
The appeal was filed by CTIN on September 7, 2023, questioning additional assessment notices and demand notices relating to Companies Income Tax, Education Tax, and Withholding Tax. The institute had also queried a notice of refusal to amend the assessments issued in September 2023.
The tribunal's decision was made by a five-member panel, which included Anthony Amoman, Dr. Chukwudi Ezeudeka, Dr. Gbenga Falana, and Amina Ibrahim, in addition to Chief Moremi Soyinka-Onijala. The panel carefully considered the statutory duties and obligations of the parties in relation to the transactions that gave rise to the appeal.
Key points
- The Cement Technology Institute of Nigeria must pay approximately N2.03 billion in Companies Income Tax and Tertiary Education Tax.
- The tax assessments were issued by the Nigeria Revenue Service, formerly known as the Federal Inland Revenue Service.
- The tribunal directed the tax authority to recompute the assessment within 30 days.
