The Tax Appeal Tribunal (TAT or "the Tribunal") sitting in Benin recently held, in the case between Bayelsa State Board of Internal Revenue ("BSBIR" or "the Board" or "the Appellant") and Century Energy Services Limited ("the Company" or "CESL" or "the Respondent") that the TAT has jurisdiction to hear and determine the claims by BSBIR for Bayelsa State Infrastructural Maintenance (BIM) Levy and Development Levy being pieces of legislation enacted by the Bayelsa State House of Assembly, and derived from the operations of the Personal Income Tax (PIT) Act (as amended).

TAT also decided that the Respondent is liable to pay the Appellant ₦264,000,000 (inclusive of interest and penalty) for 2011 to 2018 tax years, being the best of judgement (BOJ) assessment in respect of Pay-As-You-Earn (PAYE) tax, development levy and Bayelsa State Infrastructural Maintenance levy in accordance with the provisions of the relevant laws.

Facts of the case

BSBIR alleged that CESL failed to file returns and pay its PAYE taxes, development levy, and BIM levy on behalf of its employees resident in Bayelsa State from 2011 to 2018 tax years. Consequently, the Appellant served a BOJ assessment of ₦264,000,000 on the Respondent in respect of the above tax and levies for the relevant tax years. However, following the Company's failure to pay the administrative assessment despite several notifications, demand notices and letters of invitation, the Board filed an appeal before the TAT on 20 April 2021 seeking the following reliefs:

a. An order that the Respondent is indebted to the Appellant to the sum of ₦264,000,000, being unremitted PAYE tax, development levy and BIM levy in accordance with Section 1(b) and (d) of the First Schedule to PIT Act, Taxes and Levies (Approved List for Collection) Act,1998 (TLA) (as amended) and Bayelsa State Infrastructural Maintenance Levy Law, 2003.

b. An order directing the Respondent to pay to the Appellant the sum of ₦264,000,000 inclusive of interest and penalties, being the assessed tax liability for the 2011 to 2018 tax years.

c. An order demanding the Respondent to file its tax returns with the Board as prescribed by the relevant law.

d. A declaration that the Respondent is liable to file returns and remit its PAYE tax liabilities in accordance with Sections 81(2) and 82 of PIT Act (as amended).

e. A declaration that the failure, refusal and/ or neglect of the Respondent to deduct and remit PAYE tax from payments to its employees is in breach of Sections 81 and 82 of PIT Act (as amended).

f. A declaration that the failure, refusal and/ or neglect of the Respondent to file tax returns and/ or pay its tax as and when due, amounts to tax evasion punishable under Section 94 of PIT Act (as amended).

g. An order for the payment for cost of this action in the sum of ₦1,000,000 (two million naira) {sic}

h. And for such further order(s) as this Honourable Tribunal may deem fit to make in the circumstance.

CESL's argument

CESL argued that it neither had an office nor conducted any business activities in Bayelsa State, which should make it liable to pay any taxes to the Appellant. The Company also maintained that the Appellant had not sufficiently discharged the burden of proof to demonstrate that the administrative assessment served on it was not arbitrary but based on the volume of its economic activities in Bayelsa State.

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