PwC Disagrees with Tribunal’s Order for Multichoice to Deposit N900bn
The PwC Nigeria, in its review of the Tax Appeal Tribunal’s ruling in MultiChoice Nigeria Limited vs. the Federal Inland Revenue Services (FIRS), has stated that it was wrong for the tribunal to order the MultiChoice to deposit half of the disputed N1.8 trillion before it could hear MultiChoice’s appeal against the FIRS.
The FIRS had alleged that MultiChoice had under-remitted about N1.8 trillion in taxes, and directed banks with which the MultiChoice had accounts to freeze such accounts, recover the said sum and pay over to the FIRS.
But the PwC pontificated that based on the provision of the law, it would be perceived that “it is not mandatory for the tribunal to make the order for the statutory deposit.”
The PwC also stated that it would be arguable that even if the FIRS ccould prove at least one of the conditions listed in the provision, the tribunal might still exercise a discretion on whether to order the appellant to make a statutory deposit or not because the provision stated that “the tribunal may adjourn the hearing of the appeal to any subsequent day and order the appellant to deposit with the FIRS.”
It said: “The tribunal’s ruling in this case did not provide insights into how they reached the conclusion that a deposit was required based on the three conditions in the law.
“Therefore, there is room for taxpayers to challenge it if the
FIRS attempt to cite this ruling as a precedent to argue that taxpayers must make a statutory deposit prior to filing an appeal.
“It is advisable for the tribunal to carefully consider the requisite conditions for ordering the statutory deposits, and duly exercise its discretion under the provision in good faith. Not doing this may result in indiscriminate assessments and a decline in taxpayer confidence in the appeal process.”
The law provided, according to the PwC that the tribunal would make an order “if the representative of the FIRS proves to the satisfaction of the tribunal…” at least one of these three conditions: that the appellant failed to file tax returns for the year of assessment concerned; that the appeal is frivolous or constitutes an abuse of court process, and, three, that it is expedient to require the appellant pay the statutory deposit.