Famsville Solicitors

FIRS lacks the powers to impose turnover assessment on the value of properties

In the recently decided case of Theodak Nigeria Limited (Theodak) v. Federal Inland Revenue Service, the Federal High Court held that the Federal Inland Revenue Service (FIRS) acted ultravires the powers granted to it by the Companies Income Tax (CIT) Act by imposing a turnover assessment on Theodak relying on the value of its property. FIRS argued that Section 65 of CITA vested it with powers to exercise Best of Judgment (BOJ) assessment and its move to subject 20% of the value of Theodak Plaza was a “Best of Judgment Assessment” since Theodak failed to file returns for 2015. FIRS also argued that the action before the court was incompetent as Theodak failed to object to the assessment within 30 days, making the assessment final and conclusive.

The Federal High Court held that the FIRS lacks the powers to impose turnover assessments on the properties of taxpayers even when such taxpayers have failed to file their Annual returns except such company is in the business of selling property and fails to file its annual returns. The Federal High Court sitting at Abuja also held that the wording of Section 69(1) CITA “If anybody disputes the assessment, it may apply to the board by notice of objection in writing…” is to the effect that application to the Board is not mandatory but discretionary.

Nigerian President signs executive order mandating Nigerian taxpayers to declare and pay tax on their offshore assets

Nigerian President signs executive order mandating Nigerian taxpayers to declare and pay tax on their offshore assets.
The Nigerian President, Mohammadu Buhari on the 8th of October signed the Executive Order 8 of 2018 (EO8) on Voluntary Offshore Asset Regularization Scheme, (VOARS).
This is part of the ongoing anti-graft drive by the Federal Government to combat money laundering, tax evasion and broadly corruption in Nigeria.
According to a statement issued by the President’s spokesperson, “the scheme will help to facilitate the expedient regularisation of offshore assets connected to Nigeria” and lead to “a new expanded tax base for the Federal Government, and also fund the Nigeria Infrastructure Fund in Switzerland.”
The VOARS strengthens the legal obligation on every citizen to declare their assets and incomes and pay tax on same.