In 2018, the Federal Inland Revenue Service (FIRS) audited McKinsey & Company Nig. Global Limited (McKinsey or the “Company”) and raised assessments covering Companies Income Tax (CIT), Withholding Tax (WHT), and Value Added Tax (VAT) relating to a number of varying issues. Following an objection by the Company and a subsequent Notice of Refusal to Amend (NORA) issued by the FIRS, the Company filed a Notice of Appeal to the Tax Appeal Tribunal (TAT or the Tribunal).
Among other rulings, the TAT held that security services are not professional in nature and therefore attract WHT at 5%. In making this ruling, the TAT relied on definitions in the FIRS Circular 2009/01 and the Black Law’s Dictionary. The TAT also highlighted that NSCDC does not license individuals or provide for any specific type of training or certification for private security personnel.
Please see the TAT judgment and PwC's Tax Alert below:
Download TAT rules that WHT applies at 5% on security services - Tax Alert (1)