FIRS’ Approach to Tax Dispute Resolution: Navigating Appeals and Settlements for Nigerian Businesses.

Introduction:

Tax disputes can arise for various reasons and resolving them efficiently is essential for maintaining a healthy business environment. The Federal Inland Revenue Service (FIRS) in Nigeria has established procedures for handling tax disputes and promoting fair and transparent resolutions. In this article, we will explore FIRS’ approach to tax dispute resolution and provide guidance on navigating appeals and settlements for Nigerian businesses.

Understanding Tax Dispute Resolution with FIRS:

1. Tax Audit Findings: Tax disputes often begin when a business disagrees with the findings or assessments resulting from a tax audit conducted by FIRS.
2. Informal Resolution: The initial step in resolving a tax dispute is often informal discussions between the taxpayer and FIRS officials. This may include clarification of issues, presenting additional information, or negotiating a settlement.
3. Formal Appeals: If an informal resolution is not reached or if the taxpayer remains dissatisfied, they can escalate the dispute to the formal appeals stage.

Navigating the Appeals Process:

1. File a Notice of Objection: To initiate the formal appeals process, the taxpayer must file a “Notice of Objection” within 30 days of receiving the FIRS assessment.
2. Gather Evidence: Collect all relevant documents, records, and supporting evidence to substantiate your case. This evidence will be crucial during the appeals process.
3. Engage Tax Professionals: Consider hiring experienced tax professionals or legal experts who are well-versed in Nigerian tax laws to represent your interests during the appeals process.
4. Prepare Appeals Documents: Work with your representatives to prepare the necessary appeals documents, including a statement of facts, legal arguments, and a proposed adjustment.
5. Attend Appeals Meetings: Participate in appeals meetings with FIRS officials and present your case thoroughly and professionally. Be prepared to answer questions and provide evidence.
6. Negotiate Settlements: During the appeals process, you may have opportunities to negotiate settlements with FIRS. These settlements can lead to more expedient resolutions.
7. Decision and Implementation: FIRS will issue a decision after reviewing the appeals. If you accept the decision, ensure timely implementation of any adjustments or payments.

Settlement Options:

1. Mutual Agreement Procedure (MAP): MAP is available for disputes involving double taxation, where Nigeria has a Double Taxation Avoidance Agreement (DTAA) with the relevant country. It allows for negotiations between tax authorities to resolve the issue.
2. Alternative Dispute Resolution (ADR): ADR methods, such as mediation and arbitration, can be used to resolve disputes amicably without resorting to lengthy legal processes.

Key Considerations:

1. Timeliness: Act promptly when disputing an assessment. Missing deadlines can weaken your position.
2. Professional Representation: Engage experts who understand the Nigerian tax system to guide you through the process effectively.
3. Documentation: Maintain meticulous records throughout the dispute resolution process to support your case.
4. Transparency: Be transparent in your communication with FIRS and provide all requested information.
5. Appeal Rights: Familiarize yourself with your rights and responsibilities as a taxpayer during the appeals process.

Conclusion:

Navigating tax dispute resolution with FIRS can be complex, but it is crucial for maintaining a favorable business environment in Nigeria. By understanding FIRS’ approach to dispute resolution, engaging professional representation and adhering to timelines and documentation requirements, Nigerian businesses can effectively navigate appeals and settlements. A proactive and professional approach to resolving tax disputes not only safeguards your financial interests but also contributes to a transparent and accountable tax system that benefits businesses and the Nigerian economy as a whole.

For professional advice on Accountancy, Transfer Pricing, Tax, Assurance, Outsourcing, online accounting support, Company Registration, and CAC matters, please contact Sunmola David & CO (Chartered Accountants & Tax Practitioners) at Lagos, Ogun state Nigeria offices, www.sunmoladavid.com. You can also reach us via WhatsApp at +2348038460036.