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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.”
The Adamawa Government has approved the sum of N55.5 billion as supplementary budget for the 2024 financial year.
Mrs Neido Kofulto, State Commissioner for Information and Strategy said this while briefing newsmen on the development in the late hours of Tuesday in Yola.
She said the supplementary budget was part of the emergency Executive Council Meeting presided over by the state Deputy Governor Prof.
Kaletapwa Farauta.According to her, the supplementary budget is necessitated by the need to capture and finance projects which were not initially captured in the main budget.
“The council resolution on the supplementary estimate will soon be presented to the State House of Assembly for ratification and approval,” she said.
Mr Emmanuel Piridimso, State Commissioner for Budget and Planning said the budget was initiated to finance other additional projects as the State finances had reasonably increased.
According to him, the ministries captured in the supplementary budget are, Ministry of Education, Women Affairs, Commerce and Industries and Works and Energy Development and among others.
The Adamawa government had on Dec. 9, 2023 presented an appropriation estimate of N225.8billion.
(NAN)
From Attah Ede Makurdi
The acting Chairman of Benue State Internal Revenue Services (BIRS), Mr. Emmanuel Agema, on Monday, lamented over the activities of illegal tax collectors in the State, saying prominent people with the State are behind the mounting of those illegal checkpoints across the state.
Mr. Agema who disclosed this while speaking with newsmen in Makurdi, said that not more than 35 persons have been charged to court.
He maintained that upon assumption of office, the board decided to terminated revenue contract with a few to close revenue leakages about and now using the board staff to collect taxes, a development, he said has assisted the board to generate more revenue for the state.
The acting chairman said the State government has giving the board a target to generate over 16 billion as internally generated revenue for 2024, adding that in 2023, the board met its 14 billion target and surpassed it.
Mr. Agena who decried the activities of illegal tax collectors in the State, said most of them are backed by very prominent individuals, averring that under his watch, the era of patronizing politicians is over.
“We have already arrested 35 people who are engaging in illegal tax collection and have been arraigned in court.
He disclosed that a truck conveying palliatives from Adamawa to Anambra State was hijacked by some youths in Aliade, Gwer East local government area of the State
According to him, the youths who mounted illegal checkpoint, stopped the vehicles, broke their windscreen and stole the sum of #200,000 from one of the drivers.
He said two persons have been arrested and transferred to the DSS on the governor’s directives that a thorough investigation be carried out to fish out those behind illegal tax collection in the state
“The truck was intercepted and the driver beaten while the windscreen of the vehicle broken and over 200,000 naira stolen. 3 persons have been arrested and are in police custody. They will be moved to DSS for thorough investigation
“Our aim is to flush out or reduce illegal tax collectors to the barest minimum. This has been a big challenge. We have constituted a team headed by director of Tax collection. Prominent people in the State are involved in encouraging these boys.
“We also plan to recover over 5.6 billion from ground rent. We are liaising with the Ministry of Land towards this direction.
“We also, engaged the service of Softnet, an ICT company to aid us collect revenue. They are paid commission. The company have engaged over 250 staff who have been trained and given POS to collect revenue.
“Taxation is about confidence. Our work now is easy because tax payers are willing to pay because the people are seeing what government is doing”.
1996 Olympic gold medalist, Emmanuel Amuneke, has said that although he would love to coach the Super Eagles if given the opportunity, he was not desperate for the job.
Amuneke, a former Super Eagles player, said this while addressing newsmen in Owerri on Tuesday.
The former Nigeria U-17 national team coach and former coach of the Tanzania national team, said the job of coaching Nigeria’s national team should be given on merit and to whom with the interest of football and Nigeria at heart”.
The Spain based former striker, who played for Sporting Lisbon football club in Portugal and Barcelona football club, expressed confidence that the Nigeria Football Federation (NFF) would eventually appoint the ideal coach for the Super Eagles top job.
He said that with a plethora of Nigerian talents scattered across the globe, a lot of professional capacity, technical expertise and consultation would be required to harness the talents, combine them and achieve the needed balance.
“The Super Eagles’ upcoming World Cup qualification matches against the Bafana Bafana of South Africa and their counterparts from Benin Republic would necessitate the appointment of a substantive coach who would also need some time to put the house in order for best results.
“I am not desperate to be Super Eagles coach, though I nurse the ambition to coach.
“If I have the opportunity to serve my fatherland , I will accept it and deliver my all,” he said.
He however, called for the development of football at the grassroots for further development of the Nigerian league for harnessing of more talents. (NAN)
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