close
Share with your friends

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.

1000

Related content

Summary

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

The KPMG name and logo are trademarks used under license by the independent member firms of the KPMG global organization. KPMG International Limited is a private English company limited by guarantee and does not provide services to clients. No member firm has any authority to obligate or bind KPMG International or any other member firm vis-à-vis third parties, nor does KPMG International have any such authority to obligate or bind any member firm. The information contained herein is of a general nature and is not intended to address the circumstances of any particular individual or entity. Although we endeavor to provide accurate and timely information, there can be no guarantee that such information is accurate as of the date it is received or that it will continue to be accurate in the future. No one should act on such information without appropriate professional advice after a thorough examination of the particular situation. For more information, contact KPMG's Federal Tax Legislative and Regulatory Services Group at: + 1 202 533 4366, 1801 K Street NW, Washington, DC 20006.

Connect with us

 

Want to do business with KPMG?

 

loading image Request for proposal