The Tax Appeal Tribunal sitting in Abuja on Friday adjourned indefinitely for the Federal Inland Revenue Service (FIRS) to file its processes in appeal of N127 billion.
Trafigura Beheer BV, an oil company, is engaged in oil business transactions with Pipelines and Products Marketing Company (PPMC) Limited of Nigeria.
The company had filed an appeal at the tribunal challenging the FIRS for the alleged N127 billion tax liabilities.
The tribunal presided over by Mr Nnamdi Ibegbu (SAN) had adjourned indefinitely after FIRS told the tribunal that it had not file its processes.
At the last sitting, Ibegbu had ordered that all processes be filed and served by both parties before the next adjournment date.
At the resumed hearing on Friday, FIRS counsel, Mr Olakunle Yusuf, told the tribunal that they had not filed their processes.
However, counsel for the appellant, Mr Daniel Ohabuike, did not respond.
The company had filed an appeal at the tribunal, challenging the FIRS for the alleged N127 billion tax liabilities.
It questioned the demand for payment of outstanding tax liabilities dated Feb. 24, 2014, served on it by the FIRS covering years 2010 to 2014 and amounting to 642,536,470 million dollars (about N127.86 billion)
The company had alleged that it was not based in Nigeria and therefore should not be liable to pay tax.
“The Crude Oil Refined Products Exchange Agreement between the company and PPMC is for the exchange of crude oil Free-On-Board delivered and cleared for export at designated Nigerian port.
“The agreement is also for refined product delivered by the company with transfer of title passed upon delivery to or from the vessels,’’ the company said.
It also alleged that this was not a permanent structure that would constitute a fixed base of business in Nigeria under the Companies Income Tax Act (CITA).
The appellant alleged that FIRS misapplied the Company Income Tax Act (CITA) when it found that the appellant cleared for exports from Nigeria.
“The appellant does not qualify under Nigerian law to file tax returns as it is not a Nigerian company and does not have a fixed base of business in Nigeria.
“Under Nigerian laws, the appellant is not a company to which a deemed income approach can be applied.
“The company did not derive any profit in Nigeria that would result in an obligation to file corresponding tax returns.’’
However, the FIRS said that the company was engaged in oil business transactions with PPMC on regular basis and therefore liable to tax in Nigeria.
“The company is yet to file tax returns with the FIRS. Since the company’s financial statements are not available, deemed income approach has been used to arrive at tax liabilities of the company.
“Deemed tax rate of six per cent applies on the value of crude products,’’ FIRS said.
