Ecobank Nigeria has said it will at the Federal High Court appeal the N1.6 billion judgment against it by the Tax Appeal Tribunal.
The bank also said the excess dividend tax liability is N1.3 billion and not N1.6 billion.
The bank disclosed this on Thursday in a statement signed by the bank’s management.
The Tax Appeal Tribunal, Lagos Zone, had ordered Ecobank to pay at least N1.6 billion to the Federal Inland Revenue Service (FIRS) as its company income tax for 2016.
The tribunal declared as null and void, the decision of Ecobank Nigeria Limited to pay N5.5 billion as dividends to its shareholders ‘in a year the bank claimed it made no taxable profit and rather declared losses from its banking operation.”
The bank said the dividend declared relates to income from sources which are statutorily exempt from tax by virtue of the Companies Income Tax (Exemption of Bonds and Short Term Government Securities) Order, 2011.
Read the full statement below.
Ecobank Nigeria wishes to provide its position on a statement released by the Federal Inland Revenue Service (FIRS) on the judgment of the Tax Appeal Tribunal (TAT), sitting in Lagos in respect of disputed tax liability between the Bank and the FIRS for the 2015 financial year.
For purposes of clarity, the decision of the TAT was for the Bank to pay excess dividend tax on the dividend sum of N5,545,000,000 declared by the Bank from its 2015 financial accounts. Based on the decision of the TAT, the excess dividend tax liability is N1,311,673,367 and not N1.6 billion.
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The Bank will be appealing to the Federal High Court against the decision of the TAT as it believes, based on advise from its professional consultants, that the dividend declared relates to income from sources which are statutorily exempt from tax by virtue of the Companies Income Tax (Exemption of Bonds and Short Term Government Securities) Order, 2011.
Whilst the bank is always open to engagement, its position is based on the principle that income established to be exempt from companies’ income tax should not, contrary to the intendment of the law, be subjected to the same tax it was intended to be exempt from.
Ecobank Nigeria is a member of the Ecobank Group, the Pan-African Bank which is proudly and fully committed to transparency in all the countries where it operates.
We abide by laws and regulations and believe that this matter should be conclusively determined in line with the applicable judicial process.
Ecobank Nigeria Management