In an analysis of the ruling contained in its PwC Tax Alert
posted on its website on Wednesday, the firm, stated the TAT did not refer to
any of the three conditions necessary for the issuance of an order to compel
payment of N900bn, but focused on the order for statutory deposit. While noting
that the tribunal cited many cases and held that the payment of the statutory
deposit is a condition required to trigger the appeal, it said the tribunal
proceeded to order MultiChoice to comply with the provision by making the
deposit before the next hearing.
PwC stated that Paragraph 15 (7) of the Fifth Schedule of
the FIRS Act, on which the tribunal hung its ruling, is separable into two
parts, with the first stating conditions for the order and the other the order
to be made.
The section states: “At the hearing of any appeal if the
representative of the Service proves to the satisfaction of the Tribunal
hearing the appeal in the first instance that
(a) the appellant has for the year of assessment concerned,
failed to prepare and deliver to the Service returns required to be furnished
under the relevant provisions of the tax laws mentioned in paragraph 11;
(b) the appeal is frivolous or vexatious or is an abuse of
the appeal process
(c) it is expedient to require the appellant to pay an
amount as security for prosecuting the appeal, the Tribunal may adjourn the
hearing of the appeal to any subsequent day and order the appellant to deposit
with the Service, before the day of the adjourned hearing, an amount, on
account of the tax charged by the assessment under appeal, equal to the tax
charged upon the appellant for the preceding year of assessment or one half of
the tax charged by the assessment under appeal, whichever is the lesser plus a
sum equal to ten percent of the said deposit, and if the appellant fails to
comply with the order, the assessment against which he has appealed shall be
confirmed and the appellant shall have no further right of appeal with respect
to that assessment.”
PwC noted that the words of the paragraph are conditional,
as they put the onus of proof on the FIRS.
“This clearly shows that the burden is on the FIRS to put
forward relevant materials and facts before the tribunal in proof of at least
one of the three conditions,” said PwC.
It listed those conditions as failure by the appellant to
file tax returns for the year concerned, the appeal is frivolous and that it is
expedient to require the appellant to pay the statutory deposit.
PwC further stated that it was strange that the tribunal did
not refer to any of the three conditions in reaching its decision.
“As a result, the tribunal did not mention which facts were
placed in proof of such condition(s) or how it considered that the FIRS’ facts
were cogent enough to trigger the provision. The tribunal ignored this critical
part of the provision and focused on the order for statutory deposit,” PwC
stated.
It also observed that Paragraph 13 (7) of the Fifth Schedule
of the FIRS Act requires aggrieved taxpayers to meet only two conditions, which
are appealing within 30 days and payment of the filing fees. Beyond this, it added, the FIRS must prove
the conditions before the tribunal (at its discretion) can issue an order for
statutory deposit.
“Based on the provision of the law, it is perceived that it
is not mandatory for the tribunal to make the order for statutory deposit.
It is arguable that even if the FIRS can prove at least one
of the conditions listed in the provision, the tribunal may still exercise a discretion
on whether to order the appellant to make a statutory deposit or not,” it
stated.
It advised the tribunal to carefully consider the requisite
conditions for ordering the statutory deposits and exercise its discretion
under the provision in good faith. The I'm
Not doing this, it added, may result in indiscriminate
assessments and a decline in taxpayer confidence in the appeal process.
.jpeg)
0 comments:
Post a Comment