On 8 October 2020, the Tax Appeal Tribunal delivered a ruling in the case of Citibank Nigeria Limited v. Rivers State Board of Internal Revenue (RBIR). The Tribunal held that the tax authorities must prove that there was fraud, willful default or neglect in order to invoke the tax law provisions that allow an investigation of taxpayers beyond the standard six-year statutory period.
In August 2018, RSBIR notified Citibank of its intention to carry out a back-duty Pay-As-You-Earn (PAYE) tax investigation of the Appellant’s records for a nineteen year period covering 1999 to 2017 financial years. The Appellant responded to the notice stating its inability to provide documents beyond the six years provided for document retention by Section 332(2) of the Companies and Allied Matters Act, 1990, CAP C20, LFN, 2004 (CAMA), and requested for a meeting with the Respondent.
The Respondent, however, ignored the Appellant’s request to meet and issued a best of judgment assessment amounting to N303.9 million (including penalty and interest) in respect of PAYE taxes for 2006 to 2017 FYs, covering a twelve year period.
The tribunal decided that the state tax authority had failed to prove that the taxpayer had committed any act of fraud, willful default or neglect and that, therefore, the six-year statute of limitation barred an audit or investigation of years earlier than 2012.
