The Tax Appeal Tribunal issued a decision in a case entitled “United Capital Asset Management Ltd and United Capital Trustee Ltd v. Federal Inland Revenue Service” on the application of excess dividend tax in terms of section 19 of the companies income tax Act on income resulting from government and corporate bonds, which are specifically tax exempted from income tax by an exemption order issued by the president.
The Tribunal stated that under section 19 of the corporate income tax applies when the time dividend declared and payment is greater than total profits and executive orders cannot supersede the Tax Law provisions including section 19 of company tax law. Under Tribunal decision, section 19 of the corporate tax law does not concern with the source or origin of the dividend paid.
