TAT rules that an employer who defaults in its agency role to the Government is liable to penalty and interest

In 2017, the Lagos State Internal Revenue Service (“LIRS”) audited Container Services Limited (“CSL”) for the 2011 - 2016 Years of Assessment. The LIRS assessed the company to outstanding PAYE, Withholding Tax (WHT), Development Levy and Business premises levy liabilities plus penalty and interest. CSL objected to the assessment and the matter was eventually taken to the TAT.

The TAT ruled that CSL did not comply with the relevant provisions of PITA and the Regulations in delivering its agency responsibilities, hence, CSL is liable to the tax liability (including penalty and interest) assessed by LIRS.

 

This judgment re-emphasises the agency role of employers and the consequences of non-compliance with tax laws which could be business disruptions, and liabilities as high as the unpaid tax plus 31%.

See PwC's Tax Alert below:

Download PwC Tax Alert - TAT rules that an employer who defaults in its agency role to the Government is liable to penalty and interest