Tax Tribunal affirms Jurisdiction on Taxes accruable to States


The Benin- South South Zone of the Tax Appeal Tribunal has affirmed its jurisdictional power to adjudicate on all the Laws contained in the 5th Schedule of the FIRS Act including the Personal Income Tax Act (PITA) 2011 and other laws derived from the PITA as domesticated by the various States such as the Akwa-Ibom State Revenue Administration Law.

The Panel led by Obehi Odiase-Alegimenlen dismissed the objection filed by the Akwa-Ibom State Internal Revenue Service challenging its jurisdiction to hear the appeal filed by Homeland Integrated Offshore Services Ltd for lacking merit and affirmed that the Tribunal is well clothed with the competent Jurisdiction to entertain and determine the matter that falls on tax dispute.

The Tribunal held that Akwa-Ibom State Internal Revenue Service didn’t follow the procedure laid down by Section 58(3) of the Personal Income Tax Act (PITA) 2011 for failure to give a notice of refusal to amend (NORA) the Revised Assessment to the Homeland Integrated Offshore Services Ltd before going to the Revenue Court, and the implication is that the purported case at the said Revenue Court cannot stand.

From facts, the Appellant- Homeland Integrated Offshore Services had filed an appeal against the re-assessment / refusal to amend / Demand Notice of the Akwa Ibom State Internal Revenue Service on the ground that the decision of the Akwa-Ibom State Internal Revenue Service to impose the sum of #885,094,814.76 (Eight Hundred and Eighty-Five Million, Ninety-Four Thousand, Eight Hundred and Fourteen Naira, Seventy Six Kobo) only as tax liability for the years 2015-2019 after it had imposed a liability of #49,376,418.08 for the same periods which was objected to and amended to #25,634,124.21, is excessive, arbitrary and not in accordance with the provision of the personal income Tax( Amendment) Act, 2011 CAP P8 LFN 2004.

In defence, the respondent- Akwa-Ibom State Internal Revenue Service filed a Notice of Preliminary Objection urged the Tribunal to strike out the Appeal for lack of jurisdiction on the grounds that the Tribunal does not have jurisdiction to entertain matters relating to taxes accruable to the State, and the Appeal constitutes an abuse of court process, having been filed during the pendency and subsisting matters at the Revenue Court, in Akwa Ibom and Federal High Court, Lagos.

In reply, the counsel to Homeland Integrated Offshore Services Ltd, J. N. Odey maintained that the subject matter of the Appeal falls under the jurisdiction of the tribunal and urged the Tribunal to hold so.

In a well-considered ruling, the tribunal led by Hon. Prof. Obehi Odiase-Alegimenlen as Chairman, Hon Dr. Ala-Peters David, Hon. Mrs. Hilda Ofure Ozoh, Hon. Barr. Ajoku Vitalis Friday and Hon. Prof. Olatunde Julius Otusanya as members stated that Pay as You Earn (PAYE) taxes for individuals are collected and administered by the various states through the various states’ relevant tax authorities which Akwa-Ibom State is one.

The Tribunal reiterated that the principal law that governs the administration and collection of Personal Income taxes such as the PAYE, sole traders, partnerships etc is the Personal Income Tax Act (PITA) 2011 and Sections 60 of the Act provides that the Tax Appeal Tribunal established pursuant to section 59 of the Federal Inland Revenue Service (Establishment) Act, 2007 shall have the powers to entertain all cases arising from the operations of the Act.

Furthermore, the Tribunal affirmed that Section 59 of the Federal Inland Revenue (Establishment) Act, 2007 also confers jurisdiction on the Tax Appeal Tribunal to adjudicate over taxes listed in the Fifth Schedule of the Act, and also gave powers to the Tribunal to resolve disputes arising from the operations of all the tax laws listed under the First Schedule to the FIRS (Establishment) Act.

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