July 30, 2019

Dame Gladys Simplice, Isaac Adedayo, Samuel Agbeluyi and Innocent Ohagwa have emerged in the new leadership team of the Chartered Institute of Taxation of Nigeria (CITN) with the mandate to pilot its affairs for the next two years. In a statement made available to Next Level in Lagos, the institute said while Simplice would be the leader of the team as the president and chairman of council, Adedayo would serve as vice president, with Agbeluyi and Ohagwa would function as Deputy Vice President and Honourary Treasurer, respectively. Simplice holds BSc Economics from Ahmadu Bello University, Zaria. She started her training in accountancy with A. B. Alabi & Co/Alabi Bakoh Ekundare & Co. (Chartered Accountants and Secretaries). She was thereafter employed as an assistant accountant at a private Fisheries Company, Transcontinental Fisheries Ltd in Lagos. In August 1982, she began her tax career with the Federal Inland Revenue Department, (now Federal Inland Revenue Service) and retired after 27 years of a fulfilling and meritorious service. She was later given a contract appointment as Head, Channels Management of the Corporate Communication Department of FIRS in 2009. Adedayo on the other hand, acquired his professional experience from the Office of the Auditor General for the Federation (1984-1993) and the firms of Adetona Isichei & Co (Chartered Accountants) 1993–1999 and Akintola Williams Deloitte (Chartered Accountants) from 1999-2002. He is currently the Head of Practice, Adesina Adedayo & Co. (Chartered Accountants and Tax Practitioners) and the Chief Executive Officer of AIA Professional Services Limited (Business Restructuring & Organisation Development). He holds a Special Executive Masters in Leadership & Strategy from the Metropolitan School of Business and Management (UK). Also, Agbeluyi has a Higher National Diploma in Accountancy from Yaba College of Technology, Master of Science (Finance) from the Lagos State University and MBA (Marketing) from ESUT Business School, Enugu. He was in the University of Bradford, United Kingdom, where he bagged LLB in Law and graduated with BL from the Nigerian Law School in the 2012. He has worked with Jagal Group of Companies, Reals Group of Companies, Harmony Securities Ltd., among others. He is currently engaged in private practice in the areas of Tax Consultancy, Financial Consulting and Legal Advisory. Agbeluyi is the Principal Consultant, SOA Global Consulting Services. On his part, Ohagwa holds a BSc in Accounting from the University of Lagos and a Master in Business Administration from Bayero University, Kano. He was trained and qualified as a Chartered Accountant. He worked with then firm of Akintola Williams & Co Chartered Accountants, Lagos, with Century Merchant Bank Limited and Muktari Dangana & Co. Chartered Accountants, Kano before joining the Federal Inland Revenue Service. He is currently the Director, Special Tax Audit, Federal Inland Revenue Service for Lagos State.   Source: Daily trust

Background Section 19 of the Companies Income Tax Act (CITA) imposes tax at 30% on a company where it declares and pays dividends in excess of its total profit. The relevant total profit is the profit of the year from which the dividend was declared and not the profit of the year in which the dividend was paid. The tax imposed by section 19 is generally referred to as Excess Dividend Tax [EDT]. Previous decisions of the Tax Appeal Tribunal [TAT], Federal High Court  [FHC] and Court of Appeal [CoA] on section 19 have all been against the taxpayers. Facts of the appeal The company involved in this case declared and paid dividends to its shareholders in financial year 2014 even though it had no taxable profits for the year. Based on the audited financial statements, the dividends paid were from retained earnings which had suffered tax in previous accounting years. Taxpayer’s position The company’s arguments are: Section 19 is an anti-avoidance provision introduced to curb tax avoidance schemes where a company pays dividends out of accounting profits or distributable reserves without paying any tax on such distributions. As an anti-avoidance provision, section 19 must be applied to cure tax avoidance schemes only. In the instant appeal FIRS’ application resulted in double taxation since the retained earnings from which the dividends were paid had already been subject to tax in previous years, the mischief rule as opposed to the literal rule should be applied to achieve the objective of section 19.  before section 19 is applied, FIRS must be able to establish that a taxpayer had carried out a tax avoidance scheme. The company also asked the Tribunal to distinguish the earlier decisions because in this case, there was uncontroverted evidence before the TAT that the taxpayer had not carried out any tax avoidance scheme. FIRS’s position The FIRS’s position was that section 19 should be interpreted literally. It argued that in applying the section, two things should be considered: the year of assessment in which the dividend was paid;  the total (taxable) profit of the company for that year. Where the dividend exceeds the taxable profit or there is no taxable profit, the excess should be deemed as profit and subject to tax. The decision The TAT, following previous decisions, applied the four-step test established in those decisions, ruled against the taxpayer. The TAT refused to distinguish the appeals even though there was evidence that the taxpayer paid tax in previous years on the profits from which the dividend was paid.   Source: Mondaq