The Tax Appeal Tribunal (TAT) has mandated Nigeria Liquefied Natural Gas Limited (NLNG) to pay $27.5 million to the Federal Inland Revenue Service (FIRS) as a full and final settlement for the revised Companies Income Tax (CIT) assessment for the year 2016.
The judgment, delivered by a five-member panel chaired by Mrs. Alice Iriogbe, came after extensive legal proceedings and negotiations between the parties.
The TAT’s decision was based on the terms of settlement agreed upon by both NLNG and FIRS.
The legal dispute began when NLNG contested FIRS’ notice of additional assessment dated December 15, 2021, which demanded $141.75 million in CIT for 2016.
Following FIRS’ refusal to amend this assessment in March 2022, NLNG filed an appeal with the TAT in April 2022 under the suit marked TAT/ABJ/APP/331/2022.
Despite the ongoing trial, both parties engaged in settlement negotiations, culminating in an agreement filed with the tribunal on July 10, 2024.
The certified true copy of the judgment, made available on Tuesday, revealed that NLNG agreed to pay $27.5 million as the final settlement if the payment was made by July 12, 2024.
The judgment stated, “The appellant (NLNG) on Monday, July 8, 2024, duly remitted the said sum of $27.5 million to the respondent (FIRS), being the full and final settlement amount agreed upon by the parties. The terms contained in the terms of settlement have been adopted and made the judgment of this honourable tribunal. This is the judgment of this Honourable Tribunal.”
Earlier in the proceedings, NLNG had filed an interlocutory motion seeking to disqualify the tribunal from hearing the case, citing potential bias due to the involvement of two tribunal members who were former FIRS employees.
However, this motion was dismissed by the tribunal, which found no substantial grounds for the disqualification request.
The tribunal’s ruling marks a notable resolution in the ongoing tax dispute between NLNG and FIRS, reflecting the effectiveness of the TAT in mediating complex tax-related conflicts.
It also underscores the importance of legal and procedural adherence in corporate tax matters in Nigeria.
The judgment has been met with varied reactions from stakeholders, highlighting the broader implications for corporate tax compliance and governance within Nigeria’s burgeoning energy sector.
