Stanbic IBTC Bank Plc (“Stanbic” or the “Bank”) set up a reward scheme (the “Programme”) for exceptional employees. The Programme entailed subsidising the interest on mortgage loans taken by qualifying employees, and therefore the Bank recognised these costs in its books. The FIRS disallowed expenses relating to the Programme.
Also, the Bank incurred legal expenses in respect of a Court of Appeal (COA) suit against the Financial Reporting Council of Nigeria (FRCN) and the National Office for Technology Acquisition and Promotion (NOTAP). The FIRS also disallowed the legal costs on the grounds that they were avoidable and were not necessarily incurred in the course of the Bank’s business.
In an interesting turn of events, the Tribunal ruled in favour of the FIRS and held that the Bank was liable to the additional assessments in both instances.
Please see the TAT judgment and our Tax Alert on this, below:
Download TAT says certain legal costs and employee remuneration are not deductible