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Firm to Pay N1.7bn Recovered Tax to FIRS
From Joy Okeke, Lagos
Tax Appeal Tribunal, Tuesday, in Lagos has ordered Prime Plastichem Nigeria Limited (PPNL) to pay additional tax liability of N1.738,481,875.33 to the Federal Inland Revenue Service (FIRS) as the correct income tax which the PPNL should pay on its profit for doing business in Nigeria under the provisions of Transfer Pricing Regulation No1 2012.
The tax tribunal handed down this verdict in Appeal No.
TAT/LZ/CIT/015/2017 instituted before it by PPNL, which disputed the FIRS’s additional tax assessment liability.The tax suit followed a NG disagreement between PPNL, a firm that “engages in the business of trading in imported plastics and petrochemicals,” and the FIRS on the Transfer Pricing Documentation filed by the PPNL “for 2013 and 2014” concerning the PPNL’s “transaction with a related company, Vinmar Overseas Limited (VOL)”.
While the PPNL “adopted the Comparable Uncontrolled Price (CUP) for its filing, the FIRS insisted that the Transactional Net Margin Method (TNMM) was the correct tax assessment tool to apply in this particular case.
Responding to the arguments adduced against it by PPNL at the tax tribunal, the FIRS stated that PPNL “misrepresented information” to the Service “by stating that Vinmar International Limited (VIL) only engages in information collection and liaising activities on one hand, and on the other hand, its submission to the Tribunal stated that VIL engages in sales of similar products as itself the Appellant.”
This “misinformation”, according to the FIRS, indicated that “the controlled transactions with VIL were not at arm’s length” as claimed by the PPNL, hence cannot serve as a basis for calculating the PPNL tax liability and the reliefs sought by the firm at the tax tribunal.
Adducing documentary evidence to support its claims, the FIRS told the tribunal that the PPNL assertions “in this matter is peppered with approbation and reprobation” and amounted to speaking from “both sides of the mouth” because PPNL itself admitted in both oral and documentary evidences before the tribunal that its “use of CUP method in 2013 was done in error” hence the Appellant “changed the method from CUP to TNMM in 2014.”
In a submission which appeared to lend credence to a recent revelation by the Executive Chairman FIRS, Mr. Muhammad Nami, that multinationals operating in Nigeria have perfected a complex web of profit-shifting, especially in transactions linked with offshore corporate entities, the FIRS averred that “actual profits reported by the Appellant (PPNL) were well below what comparable entities operating at arm’s length would report.”
In what may be seen as modus operandi adopted by tax evading corporate organisations in the country, the FIRS averred before the tribunal that “having professionally reviewed the benchmarking analysis” of PPNL, it found that the firm adopted the “strategy of cherry-picking comparables” and the Service “discovered that the company failed to use the appropriate profit-level indicators (PLI) thereby producing wrong arm’s length prices for the controlled transactions.”
In its judgment, the tribunal averred that “the only point of divergence between the Appellant and Respondent was the appropriateness of using Net Profit or EBIT/Operating Revenue as Profit Level Indicator (PLI) or Gross Profit/Operation Revenue for the purpose of TNMM.”
After a detailed consideration of “the facts of the case” as adduced by both PPNL and the FIRS, the five-member tax tribunal chaired by Prof, A.B. Ahmed, resolved all five issues raised in favour of the FIRS, submitting that “the appeal filed by the Appellant is hereby dismissed in its entirety.”
A former member of the Senate, Shehu Sani, has cautioned the National Assembly against allowing its influence to be diminished by its actions.
Sani stated this while speaking at the opening of the National Assembly Legislative Aides’ Forum (NASSLAF) Week on Tuesday in Abuja.
The pro-democracy activist also urged the legislators to selflessly live up to their responsibilities, for the good of the country.
According to him, a subservient posture by the legislature is not in the interest of the country, warning that such can impede good governance and undermine democracy.
Sani compared the current national assembly with the Eighth Assembly, led by Sen.
Bukola Saraki, praising it (Eighth Assembly) for standing firm against executive’s overreach.He observed, with dismay, that the powers of the national assembly appeared to be eroded with time.
“In our time, it was unthinkable for heads of MDAs to ignore our summons. They understood the gravity of our oversight functions,” he said.
Sani warned that the current assembly risked becoming a “rubber stamp” for the executive, sacrificing its independence and weakening democratic checks and balances.
Sani, therefore, cautioned the lawmakers against prioritising their personal gains over their constitutional responsibilities.
“This institution needs respect. If you turn yourselves into stooges, you will lose that respect. Our era defended legislative independence, but it came at a cost,” he said.
The former senator further stated that their insistence on doing the right thing birthed frosty relationships with the executive and caused delay in bills’ passage, warning that excessive cooperation was dangerous, as it could breed tyranny.
Sani cited instances where heads of MDAs openly challenged lawmakers during oversight functions, a behaviour which, he said, would not have been tolerated by previous assemblies.
“The senate president must ensure that nominees for appointments and executive proposals undergo serious scrutiny. This is not a place for automatic approval,” he stated.
Sani reminded the lawmakers that their primary duty was to serve Nigerians, not the presidency.
Sani also acknowledged what he called the vital but often over-looked roles of legislative aides, describing them as the backbone of the legislature, instrumental to drafting laws and policies for the country’s governance. (NAN)
An Iyaganku Magistrates’ Court, Ibadan, on Tuesday remanded a 50-year-old man, Ismaila Aborode, in a correctional facility for allegedly being in possession of a gun, life and expended cartridges.
Aborode, whose address was not provided, was charged with unlawful possession of firearms.
The Magistrate, Mrs Gladys Oladele did not take the plea of the defendant for want of jurisdiction.
She directed the police to return the casefile to the Director of Public Prosecution (DPP) for legal advice.
She adjourned the case until Jan. 7, 2025, for mention.
The Prosecutor, Sgt. Samuel Owolabi told the court that the defendant allegedly committed the offence on Nov.
30, about 5.00 p.m, in Olede area of Ibadan.Owolabi said the defendant unlawfully possessed one locally made double barrel gun, one life cartridge and one expended cartridge, without lawful authority.
He said the offence contravened Section 3 of the Robbery and Firearms Laws of Nigeria, 2004. (NAN)
From Joseph Amedu, Lokoja
The Nigerian Police Trust Fund has commenced the construction of a modern Divisional Police station to enhance the security of Ekin-Adde community in Ijumu Local Government area (LGA) of Kogi.
The Executive Secretary, the Nigerian Police Trust Fund, Alh.
Mohammed Seidu, who performed the Groundbreaking over the weekend in Ekinrin-Adde, said the project would enable police personnel to have a good working environment towards a more secure society.According to him, Kogi is strategically located at the Centre of Nigeria and Ijumu LGA borders four States, and it is key to locate such a divisional station in the area.
He commended the Inspector General of Police (IGP), Kayode Egbetokun for his continued support in the agency’s efforts to strengthen and provide better welfare and good working conditions for the Nigerian Police.
This, he said, had been enabling the police personnel to perform effectively in protecting the lives and property of the people.
He assured that such a project would be relocated nationwide across the 36 States of the federation including FCT.
Seidu urged the contractor to do a quality job and ensure strict compliance with the specified standard, and deliver the project within the timeframe of four months.
In his remarks, the Kogi Commissioner of Police, Bethrand Onuoha said the command was happy for the gigantic project as it would take security closer to the people at the grassroots.
“You can see that this area actually requires more security presence, and when this project is completed it will attract larger personnel to this place.
“A good working and enabling environment will bring out the best in our personnel. On our side, we are going to redouble our efforts to make sure this area is safe and secured,” Onuoha said.
The CP stressed that the police and other security agencies are committed to doing their best to make sure that Kogi remains safe especially during this festive season.
The Chairman of Ijumu LGA, Alh. Haruna Ibrahim, commended the police trust fund for the gesture, and promised to support and create an enabling environment for the success of the project.
In his address, the Olu-Ade of Ekin-Adde, HRM, Oba Anthony Bamigbaiye commended the police trust fund for the gesture, saying it was a thing that the community had been yearning for.
The royal father noted that the community with over 25,000 populations had only one policeman to secure the entire community.
He stressed that the divisional station would foster economic development and security of lives and property of the people in his domain and the entire Ijumu LGA.
The traditional ruler specifically appreciated the Executive Secretary of the police trust fund being an indigene of the community for facilitating the project to boost the security of lives and property of the people.
The Project Contractor, Alh. Toyin Abubakar of RASWAS Nig. Ltd promised to execute a quality job and delivered within the timeframe by the end of March 2025
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