Tribunal Orders CTIN to Pay N2bn Tax Assessment

The Tax Appeal Tribunal (TAT), Abuja Zone, has ordered the Cement Technology Institute of Nigeria (CTIN) to pay about N2.03 billion in Company Income Tax and Tertiary Education Tax to the Nigeria Revenue Service (NRS), formerly the Federal Inland Revenue Service (FIRS).

The five-member panel gave the order on Thursday in its judgment on Appeal No. TAT/ABJ/332/2023, filed by CTIN against the tax assessment.

The panel was chaired by Chief Moremi Soyinka-Onijala, with Anthony Amoman, Dr Chukwudi Ezeudeka, Dr Gbenga Falana and Amina Ibrahim as members.

CTIN filed the appeal on Sept. 7, 2023, challenging additional assessment notices and demand notices issued for Company Income Tax, Tertiary Education Tax, and Withholding Tax for the relevant years.

The institute also challenged a notice of refusal to amend the assessment issued in September 2023.

CTIN argued that the assessment of Company Income Tax and Education Tax on interest earned from Treasury Bills, bonds and fixed deposits was unlawful and inconsistent with existing tax laws.

It also challenged the Withholding Tax assessed on management fees paid to the Bank of Industry.

In determining the appeal, the tribunal considered four key issues: whether the institute’s activities constituted trade or business, the distinction between income and taxable profit, the exemption of bonds and short-term government securities under the Companies Income Tax (Exemption of Bonds and Short-Term Government Securities) Order, 2011, as well as Education Tax and Withholding Tax.

Delivering the judgment, Soyinka-Onijala said the tribunal had considered the statutory duties and obligations of all parties involved.

The tribunal ordered a recomputation of the Company Income Tax and Tertiary Education Tax payable by CTIN.

It allowed the management fees paid to the Bank of Industry as a deductible expense and directed that the amount be deducted from the interest income in determining the revised assessable and total profit.

The tribunal also held that the Bank of Industry was required under the Companies Income Tax Act (CITA) to deduct Withholding Tax at the applicable 10 percent rate from the interest income at source and remit it to the tax authority.

It consequently credited the Withholding Tax deducted when determining CTIN’s final Company Income Tax liability.

The tribunal fixed CTIN’s Company Income Tax liability at N1,835,484,959.69 and its Tertiary Education Tax liability at N190,158,410.44, bringing the total to N2,025,643,370.13.

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“On the whole, for the reasons given above, this appeal fails and is hereby dismissed, save to the limited extent set out below,” the tribunal held.

However, the tribunal directed the NRS to, within 30 days, recompute the assessment to reflect the exemption of interest income specifically traceable to Federal Government Treasury Bills and bonds under the Companies Income Tax (Exemption of Bonds and Short-Term Government Securities) Order, 2011.