On 20 August 2019, the Tax Appeal Tribunal (TAT or Tribunal) sitting at Enugu, held that a taxpayer may not be liable to taxes (including interest and penalties) based on assessments arising after the expiration of the six years statutory period for tax audits. In addition, the Tribunal held that the Abia State Board of Internal Revenue cannot collect taxes/levies simply because they are listed under the Taxes and Levies (Approved List for Collection) Act (Taxes and Levies Act) if there are no primary legislation providing for the imposition and assessment of the tax or levy. This decision was reached by the TAT in the case between Polaris Bank PLC (Bank) v Abia State Board of Internal Revenue (ASBIR).


In 2017, ASBIR conducted a tax audit on Polaris Bank. Subsequently, the Board issued the Bank with a demand notice accompanied by a tax assessment for payment of outstanding taxes and levies comprising of Withholding Tax (WHT), Pay as You Earn (PAYE), Development Levy, Business Premises Levy as well as interest and penalties for under remittance of its tax liabilities for 2006 – 2011 tax years. The Bank objected to the assessment and subsequently appealed to the TAT.

One of the major issues for determination at the TAT was whether ASBIR was entitled to collect penalty and interest based on the demand notices served on the Bank. The Tribunal held that Polaris Bank was not liable to taxes (including interest and penalties) on the assessment because the period assessed (2006 – 2010) exceeded the six years audit period allowed for tax authorities to make additional tax assessments pursuant to Section 55 of PITA.

On whether the assessments were final and conclusive, the TAT held that the tax assessments by ASBIR were not final and conclusive because the Bank made a valid objection to the assessment within 30 days from the date the assessment was made as required under Section 68 of PITA.

With respect to the Development Levy and Business Premises Levy, the TAT held that the ASBIR could not collect the levies because there was no primary tax legislation which provided for the imposition of the levies by the ASBIR. The Tribunal noted that the Taxes and Levies Act is not a primary tax legislation and also emphasized that the fact that Polaris Bank had paid the levies in the past would not make them liable for the levies.


This decision reinforces the fundamental requirement for additional tax assessments to be made within the statutory six years' limitation period as non-compliance with this time limit could render the assessment and any accompanying interest and penalty, unenforceable against the taxpayer.

The decision also implies that even when the Taxes and Levies Act has mentioned a type of tax to be collected by the tax authorities, it will not be enforceable except such tax has been specifically imposed by an enabling law. This aligns with the fundamental principle of Nigerian tax laws.

In the light of the TAT decision, it is pertinent for taxpayers to be mindful of their rights and continue to engage relevant professionals for guidance before paying for a tax assessment.

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