non-remittance of PAYE and WHT in Nigeria


On 14 May 2019, the Tax Appeal Tribunal (TAT) sitting in Lagos, Nigeria, delivered da judgement in the case of Shell Nigeria Exploration and Production Company Limited (SNEPCO) v Lagos State Board of Inland Revenue (LSBIR) where SNEPCO was the appellant and LSBIR was the respondent. The appeal centred on the determination of when a tax assessment becomes final and conclusive and whether penalties and interests which arise from unremitted PAYE and withholding taxes (WHTs) are payable consequent upon an objected demand notice.


The case of  SNEPCO v LSBIR was an appeal against the demand notice issued by the respondent on SNEPCO for outstanding PAYE, withholding taxes and state development levy including penalties and interest for the 2007 – 2012 years of assessment. The appellant objected to the demand notice and requested the respondent to discharge the demand notice. The LSBIR issued a Notice of Refusal to Amend, and consequently, the appellant filed a notice of appeal at the Tax Appeal Tribunal.

During the course of the appeal, both parties held reconciliatory meetings and reached an agreement on substantial points of the dispute. The terms of settlement were entered as a consent judgement by the TAT. The parties however, failed to agree on penalties and interest imposed on the assessment for additional PIT by the respondent vide-Demand Notice with Reference No: LA/IRS/B468/DN/14403/06/14 dated 26 June 2014.


The appellant submitted that a valid objection was made to the respondent within the statutory time limit and as such, the demand notice is not conclusive. The appellant argued penalty and interest cannot therefore be validly imposed on the alleged PAYE and WHT liabilities. The appellant further argued that the assessment ought to remain in abeyance until the assessment is determined and that no interest or penalty can accrue on same. The appellant relied on Sections 58, 60 and 68(2) of the Personal Income Tax (PITA) and paragraph 13(3) of the Fifth Schedule to the FIRS Act in making this argument.

This article was originally published in the October 2021 issue of Financial Regulation International, Volume 24, Issue 8. Original article can be accessed here: Non-remittance of PAYE and WHT in Nigeria – Financial Regulation International (

You can also access and download the full article here.

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