In a significant victory for the banking sector, the Tax Appeal Tribunal (South-South Zone, Benin) delivered judgment in favour of Ecobank Nigeria Limited, setting aside a revised assessment of N102,693,667.15 issued by the Akwa Ibom State Internal Revenue Service (AKIRS) for alleged outstanding Withholding Tax (WHT) on credit interest for 1999 to 2020 years of assessment inclusive of penalty and interest. The decision in Ecobank Nigeria Limited v. Akwa Ibom State Internal Revenue Service (TAT/SSZ/027/2023) underscores key principles of tax limitation periods, the burden of proving exceptions to statutory time bars, the sanctity of prior reconciliations, and the requirement for fair administrative processes.
Legal principles reinforced
1. Strict Limitation Periods: Tax authorities cannot lightly bypass the six-year rule without clear, proven evidence of fraud, wilful default,or neglect.
2. Burden of Proof: The onus lies on the revenue authority to justify exceptions to time limits and the correctness of additional assessments.
3. Sanctity of Prior Reconciliations: “Final and conclusive” assessments after audits and payments bind the authority in the absence of fresh, substantiated grounds.
4. Fair Administrative Process: Taxpayers must be afforded reasonable opportunity to know and respond to the case against them.
5. Statutory Compliance with Penalties: Penalty and interest rates must strictly follow statutory prescriptions.
Tribunal sets aside additional withholding tax assessment
In a significant victory for the banking sector, the Tax Appeal Tribunal (South-South Zone, Benin) delivered judgment in favour of Ecobank Nigeria Limited, setting aside a revised assessment of N102,693,667.15 issued by the Akwa Ibom State Internal Revenue Service (AKIRS) for alleged outstanding Withholding Tax (WHT) on credit interest for 1999 to 2020 years of assessment inclusive of penalty and interest. The decision in Ecobank Nigeria Limited v. Akwa Ibom State Internal Revenue Service (TAT/SSZ/027/2023) underscores key principles of tax limitation periods, the burden of proving exceptions to statutory time bars, the sanctity of prior reconciliations, and the requirement for fair administrative processes.