Introduction:
For businesses in Nigeria, tax audits are a part of the tax compliance process. However, disagreements with the outcomes of tax audits may arise, leading to the need for appeals and dispute resolution with the Federal Inland Revenue Service (FIRS). In this article, we will provide insights into the tax audit appeals and dispute resolution process with FIRS in Nigeria.
Understanding Tax Audit Appeals:
A tax audit is an examination of a taxpayer’s financial records and tax returns by the FIRS to ensure compliance with tax laws. If a taxpayer disagrees with the findings of a tax audit, they have the right to appeal the assessment or decision.
Key Steps in Tax Audit Appeals and Dispute Resolution:
- Review the Audit Findings:
The first step in the appeals process is to thoroughly review the FIRS audit findings. Identify areas of disagreement and gather supporting documentation to substantiate the taxpayer’s position.
- File a Notice of Objection:
To initiate the appeals process, the taxpayer must file a Notice of Objection with the FIRS within 30 days from the date of receiving the tax assessment. The notice should state the grounds for objection and provide relevant evidence.
- Engage in Pre-Appeal Negotiations:
Before proceeding to the formal appeals process, consider engaging in pre-appeal negotiations with the FIRS. Open communication can lead to a resolution without the need for a formal appeal.
- Tax Appeal Tribunal (TAT):
If a resolution is not reached during pre-appeal negotiations, the taxpayer may file an appeal with the Tax Appeal Tribunal (TAT). The TAT is an independent body established to adjudicate tax disputes in Nigeria.
- Prepare for the Hearing:
Once the appeal is filed, the TAT will schedule a hearing. The taxpayer must prepare a well-structured case, presenting evidence and arguments to support their position.
- Engage Professional Representation:
It is advisable to seek professional representation from tax experts or legal counsel during the appeals process. Experienced professionals can present the case effectively and navigate the complexities of tax laws.
- Await the TAT Decision:
Following the hearing, the TAT will issue its decision, either upholding the tax assessment or ruling in favor of the taxpayer. The decision is binding unless challenged in a higher court.
- Further Appeal:
If dissatisfied with the TAT decision, either party may appeal to the Federal High Court within 30 days from the date of the TAT decision. The case can be escalated further to the Court of Appeal and, if necessary, the Supreme Court.
Conclusion:
Tax audit appeals and dispute resolution with the FIRS in Nigeria require a thorough understanding of tax laws and an effective approach to presenting the taxpayer’s case. In case of disagreements, it is crucial to follow the prescribed appeals process diligently and seek professional representation for a successful resolution.
Remember, a well-executed appeals process can protect a taxpayer’s rights, uphold tax compliance, and foster a positive relationship with tax authorities. As a trusted accounting firm, we are committed to supporting Nigerian businesses in effectively navigating the tax audit appeals and dispute resolution process with the FIRS.
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.
