INT Towers (the “Company” ) carries on the business of infrastructure sharing and colocation, i.e operates telecom facilities ( e.g masts, towers and related equipment) and gives telecom companies access to these facilities. The Company drew the attention of the Federal Inland Revenue Service (FIRS) to the automatic assessment of IT Levy (1% of its Profits Before Tax) as part of the Company’s 2021 tax returns filed on the FIRS’ e filing platform ( TaxPro Max).
After reconciliation meetings, the FIRS issued an official notice of assessment in this regard, which the Company objected to. The FIRS subsequently issued a Notice of Refusal to Amend this liability, after which INT filed an appeal at the TAT.
The Tribunal ruled that INT is a network facilities provider and not a telecoms company. Hence, the Company is not liable to pay the NITDA levy of 1% of PBT.
Many taxpayers have concerns about the automatic computations and assessments by the TaxPro Max system which may infringe on taxpayers’ right to self assessment. The system should be made flexible to allow taxpayers to assess themselves based on their interpretation of the law, and the FIRS should continue to improve on its responsiveness to resolving taxpayer issues with the system such as undue imposition of interest and penalties, uploading and utilising WHT credit, and so on.
Please see our Tax Alert on tis, in addition to the TAT judgement below:
Download TAT rules on NITDA-INT v FIRS