The Federal Inland Revenue Service (FIRS) has started issuing Notice of Refusal to Amend (“NORA” or “the notice”) to companies with open tax audit exercises. Companies affected by the notice include;
- taxpayers that have previously objected to FIRS demand notice and
- taxpayers that have resolved some queries during tax reconciliation meetings.
FIRS expects these companies to pay the tax liabilities within 30 days of receiving the notice. This call-to-action is irrespective of deliberations during reconciliation meeting. Where these amounts are still unpaid after 30 days, FIRS may use enforcement actions to recover the tax liabilities.
Section 69(5) of the Companies Income Tax Act (CITA) empowers FIRS to issue a notice of refusal to amend an assessment if there is a tax dispute between the taxpayer and FIRS. However, this differs from FIRS’ choice of issuing a NORA only on the notion that tax issues remain unresolved for 6 months even if there have been tax reconciliation meetings. Neither CITA nor any other applicable law in Nigeria grants FIRS the powers to issue a NORA based on the length of time in reconciliation.