TAT’s judgement on employer’s obligation to remit tax on voluntary pension contribution withdrawals

The Tax Appeal Tribunal (‘TAT’ or ‘the Tribunal’), sitting in Lagos on 19 June 2019, delivered a judgment in favour of Nexen Petroleum Nigeria Limited (‘Nexen’ or ‘Appellant’) in a case with Lagos Internal Revenue Service (‘LIRS’ or ‘Respondent’). The key issue for determination, amongst others, was whether the Appellant is obliged to deduct and remit pay-as-you-earn (PAYE) taxes on the Voluntary Pension Contribution (VPC) withdrawals made by its employees before the timeline stipulated in the Pension Reform Act, 2014 (PRA).

In delivering its judgment, TAT held that LIRS’ attempt to recover PAYE taxes from employers on income other than employment income earned is null and void.

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