The Tax Appeal Tribunal, Lagos Zone, has ruled as lawful an assessment in additional tax liability of N1.73bn issued to Prime Plastichem Nigeria Limited by the Federal Inland Revenue Service.
The tribunal ruled that the N1.73bn was the correct income tax that PPNL should pay on its profit for doing business in Nigeria under the provisions of Transfer Pricing Regulation No1 of 2012.
A statement from the FIRS on Tuesday said the tax tribunal gave this verdict in Appeal No. TAT/LZ/CIT/015/2017 instituted before it by PPNL.
The statement was signed by the FIRS Director, Communications and Liaison Department, Mr Abdullahi Ahmad.
The company was disputing the FIRS’s additional tax assessment liability.
The tax suit arose following disagreement between PPNL and the FIRS on the Transfer Pricing Documentation filed by the PPNL for 2013 and 2014.
The statement said while PPNL adopted the Comparable Uncontrolled Price for its filing, the FIRS insisted that the Transactional Net Margin Method was the correct tax assessment tool to apply in the particular case.
Responding to the arguments adduced against it by PPNL at the tax tribunal, the FIRS stated that PPNL misrepresented information to the service.
In its judgment, the five-member tax tribunal chaired by Prof A.B. Ahmed resolved all five issues raised in favour of the FIRS.
It submitted that “the appeal filed by the Appellant is hereby dismissed in its entirety.”