*Says Finance Act Cannot Apply Retrospectively
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The Federal High Court, Abuja, has ordered the Federal Inland Revenue Service to make tax refund to Accugas Limited based on a landmark decision taken by the court.
A statement issued by Accugas stated that the order was given by Justice N.E. Maha, following concerns raised by the company as touching the Finance Act, 2019 and its implementation by FIRS.
The statement read in part, “The Abuja Division of the Federal High Court recently delivered a landmark decision and held that the Finance Act, 2019, which became law on January 13, 2020, should not apply to trading activity conducted by Accugas Limited between January and December 2019 even if the returns reporting the trading activity were filed after January 13, 2020.
“The Finance Act 2019 deleted section 33(3)(b) of the Companies Income Tax Act, which exempted a company with at least 25 per cent imported equity capital from paying minimum tax.”
The company stated that Accugas met this threshold and wrote to FIRS to seek confirmation that notwithstanding the deletion of section 33(3)(b) of the CITA, it could claim in its returns, the minimum tax exemption in respect of trading activity conducted between January and December 2019.
“However, FIRS took the view that because the returns were filed in July 2020, after the Finance Act 2019 had become law, Accugas had lost its entitlement to the minimum tax exemption,” the firm stated.
It added, “Dissatisfied by FIRS’ position, Accugas through its counsel, AELEX (led by Messrs. Adedapo Tunde-Olowu, SAN and Theophilus Emuwa), filed an action at the Federal High Court, Abuja Division.
“It (Accugas) argued that by virtue of section 6(1)(b) and (c) of the Interpretation Act and the doctrine of vested rights, Accugas’ entitlement to the minimum tax exemption in respect of trading activity conducted between January and December 2019 subsists; notwithstanding that the returns reporting the trading activity were filed after the Finance Act 2019 had become law.
“Delivering her judgment, Justice N.E. Maha upheld AELEX’s arguments and ordered FIRS to refund any sum that Accugas had already paid as taxes, based on FIRS’ earlier assessment.”
Reacting to the judgment, according to the statement, Mr Tunde-Olowu, SAN remarked that “in view of the recent annual amendments to Nigeria’s fiscal legislation, the decision of the Federal High Court is significant as it provides taxpayers with certainty that, unless the express language is used, any amendment to fiscal legislation will not be applied retroactively regardless of the time of filing tax returns.”
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