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Nigeria: Tax assessments barred by statute of limitations

Nigeria: Tax assessments barred, statute of limitations

The Tax Appeal Tribunal delivered a taxpayer-favorable judgement in a case concerning a state-level tax dispute, finding that the tax assessments were barred by the statute of limitations.


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The tax authorities of Abia State conducted a tax audit of a taxpayer (a bank) for 2006 to 2011. At the conclusion of the audit, additional assessments were made in an amount of N1.5 billion for Pay-As-You-Earn (PAYE) taxes and for tax levies related to staff development and business premises.

The taxpayer-bank objected to the assessments but agreed to and paid an undisputed PAYE tax liability of N39 million. The Abia State tax authorities then demanded N254 million as partial payment of the alleged tax liability. The taxpayer-bank refused to pay the revised assessment.

The tax authorities eventually issued a “demand notice” but that notice reflected the prior assessment amount of N1.5 billion (thus, not taking into account the N39 million that was paid by the taxpayer-bank). 

The tribunal resolved issues in favor of the taxpayer-bank finding, in part, that the Abia State tax authorities:

  • Did not have statutory authority to impose development and business premises levies
  • Were barred by the six-year statute of limitations (the precise date when the tax audit was conducted could not be determined, so the tribunal determined that the year (2017) when the tax assessments were issued would be deemed to be the year in which the tax audit was conducted, and thus tax assessments relating to 2006 to 2010 and made in 2017 were barred by the six-year statute of limitations)
  • Could not describe the audit merely as a “tax investigation” presumably to circumvent the six-year limitation period

Read a September 2019 report [PDF 123 KB] prepared by the KPMG member firm in Nigeria

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