The FIRS had violated the terms of settlement between the FG and Halliburton. By Eki Toju

The Tax Appeal Tribunal (TAT), Lagos, on Friday ordered Halliburton Energy Services Nigeria Ltd not to pay the sum of 167.7 million US dollars (N26.8 billion) to the Federal Inland Revenue Service (FIRS).

Delivering judgment, Kayode Sofola, chairman of the five-man tribunal, gave the order over an appeal filed by Halliburton against the FIRS over a tax dispute.

On February 24, 2009, the FIRS had sent an assessment to Halliburton, asking it to pay the money as ?tax? adding that the claimed amount represented 30% of the 559 million US dollars (N89.4billion) Halliburton was fined by the US authorities for bribing Nigerian officials in January 2009.

Sofola said the FIRS assessment violated the terms of settlement and non-prosecution agreement entered into by the Federal Government of Nigeria (FGN) and Halliburton on December 11, 2010.

He explained that clause 2(i) of the agreement provided that the Nigerian government would not file any suit or causes of action against Halliburton and its subsidiaries arising from the bribery scandal.

Sofola said the terms of agreement had exempted Halliburton USA Inc. and its subsidiaries from the imposition of the assessment by the FIRS.

?While foreign companies may be liable to the imposition of tax in Nigeria in appropriate cases, Halliburton Inc. USA is not chargeable to tax in Nigeria with regard to the fine it paid to the American Government in the circumstances of the case.? He said.

According to him, there is no evidence before the tribunal to determine the quantum of the bribe that was paid to the Nigerian officials by the company.

?The respondent speculates that the fine of 559 million US dollars or the entire bribe would have formed part of the expenses that was charged in the tax returns to FIRS.

?We find that the fine is not profit and to the contrary, is a loss. Thus the case of the respondent as presented before us is untenable.

?The said assessment is defective, speculative and inconsistent with the relevant tax laws and the issues raised by the respondent are hereby set aside.? He stated.

It was reported that TAT is a tax dispute resolution centre established by Federal Government in 2010 as part of the Nigerian tax system.

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