By Ikechukwu Nnochiri

ABUJA–The Supreme Court has dismissed an appeal that Halliburton West Africa Limited, HWAL, filed to challenge a $6.9million tax debt it was mandated to pay to the Federal Government in 2002.

The apex court, in a unanimous decision by a five-member panel of Justices, affirmed the December 2, 2014, judgement by the Court of Appeal in Lagos, which directed the company to pay the sum, being an additional assessment of its revenue for four years.

The Federal Board of Inland Revenue Service, FBIRS, had in 2002, assessed Halliburton’s revenue from 1996 to 1999, and insisted that it was indebted to FG to the tune of $6,927,248.

After HWAL initially took the issue before the Body of Appeal Commissioners, BAC, and lost the case, it later sought the intervention of the Federal High Court in Lagos.

The company, among other thing, urged the court to set aside BAC’s decision by invalidating the said additional tax assessment.

It equally prayed the court to direct the FBIRS to refund to it, the US$6,927,248 additional tax it paid, with interest.

However, in processes it filed before the court, the FBIRS explained that the additional assessment arose from contract transactions between HWAL which is a foreign company incorporated in Cayman Islands, and its affiliate in Nigeria – Halliburton Energy Services Nigeria Limited, HESNL.

It noted that the two companies agreed that HWAL would obtain contracts from third parties in Nigeria, which would be executed by HESNL, with billing for the contracts made in United States of America dollars.

FBIRS told the court that it was the income that accrued to HWAL from services that HESNL rendered to third parties within the four years, that amounted to the additional tax it assessed in 2002.

The BAC had in its verdict that precipitated the court case, held that the said revenue that accrued to HWAL, which it described as recharges, were taxable incomes.

It, therefore, ordered HWAL to pay the accumulated tax to the FBIRS. Even though HWAL complied with the order, it proceeded to the high court where it got a favourable judgement.

It was the opinion of the high court that the additional tax that was assessed by FBIRS amounted to double taxation.

Aside from setting aside the decision of the BAC, the court ordered FBIRS to refund the additional tax of US$6,972,248 to HWAL.

Meanwhile, not happy with the verdict, the FBIRS took the matter before the Court of Appeal in Lagos, which in a judgement it delivered in 2014, vacated the decision of the high court and affirmed the earlier position of the BAC.

While upholding the position of the appellate court, the Supreme Court, in a judgement it delivered last Friday, held that HWAL failed to prove its assumption that its subsidiary in Nigeria had already been assessed on the same revenue and that asking it to pay the $6.9million amounted to double taxation.

In the lead judgement that was delivered by Justice Emmanuel Agim, the apex court held that HWAL and its subsidiary in Nigeria were taxable entities.

Justice Agim maintained that there was a clear evidence, particularly exhibit F, to establish that there was no assessment of Halliburton’s subsidiary in the revenue in question.

“On the whole, this appeal fails. It lacks merit. It is accordingly dismissed,” the apex court held.

It further awarded a cost of N2million against the Appellant.