The Tax Appeal Tribunal (TAT or "the Tribunal") sitting in Lagos recently held, in the case between Little Company Nigeria Limited (“LCN” or “the Company” or “the Appellant”) and Federal Inland Revenue Service ("FIRS" or “the Service” or "the Respondent"), that the transfer of the Appellant's file between tax offices, based on FIRS Guidelines and Regulations, without due consideration to the Company’s registered address was in violation of the law.

Facts of the case

LCN was incorporated in 2017 and has its registered office at Flat 10, Bayview 303 Close, 3rdAvenue, Banana Island, Lagos. The Company registered for taxes and maintained its tax profile with the FIRS Ikoyi II Medium-Sized Tax Office (MSTO), which also has jurisdiction for taxpayers with registered office in the same location as LCN. In 2021, the Tax Controller of Ajah 2 MSTO unilaterally transferred the Appellant's tax file from Ikoyi II MSTO to Ajah 2 MSTO, on the basis that one of the Appellant's business outlets -Jara Beach Resort, is within the jurisdiction of Ajah 2 MSTO.

Subsequently, the Ajah 2 MSTO raised a Best of Judgment (BOJ) VAT assessment for 2021 financial year on the Appellant and placed a notice of non-compliance at LCN’s Jara Beach Resort. The Company objected to the transfer of its tax profile from Ikoyi II MSTO to Ajah 2 MSTO stating that it had filed its tax returns at the Ikoyi II MTSO. After a meeting between the parties, it was agreed that the Appellant should pay the BOJ VAT assessment as a condition precedent to removing the notice of non-compliance at its Resort and return of its tax profile to Ikoyi II MSTO. After the Company had paid the BOJ VAT assessment, the Respondent reneged on the agreement to return the Company’s tax profile to its original tax office.

Dissatisfied with the events and actions taken by the Respondent, the Appellant filed a Notice of Appeal on November 21, 2022, before the Tribunal for adjudication.

Issues for determination

Based on the arguments submitted by both parties, the Tribunal adopted the following issues for determination:

  1. Whether the Respondent in its administrative power can mandate officers of Ajah 2 MSTO to monitor, conduct tax drive and serve the Appellant tax notices and assessments at Jara Beach Resort operated by the Appellant in accordance with the tax laws.
  2. Whether the Respondent acted within its administrative mandate when it transferred the Appellant's file to Ajah 2 MSTO in line with FIRS guidelines and regulations on segmentation.
  3. Whether the Appellant is entitled to the Reliefs sought in this suit.