Background
Issue 1
Stanbic IBTC Bank Plc (“Stanbic” or the “Bank”) set up a reward scheme (the “Programme”) for exceptional employees. The Programme entailed subsidising the interest on mortgage loans taken by qualifying employees. The Programme was designed to enhance staff performance and boost profitability; as such, the costs were recognised as staff costs in the Bank’s books. The FIRS audited the Bank’s 2016 and 2017 records and disallowed expenses relating to the Programme, resulting in a liability of about N360m for the period.
Issue 2
In 2017, the Bank incurred legal expenses in respect of a Court of Appeal (COA) suit against the Financial Reporting Council of Nigeria (FRCN) and the National Office for Technology Acquisition and Promotion (NOTAP). The FIRS also disallowed the legal costs on the grounds that they were avoidable and were not necessarily incurred in the course of the Bank’s business. The FIRS further assessed the Appellant to another liability of N361m in this regard. The dispute between both parties resulted in the appeal at the Tax
Appeal Tribunal (‘TAT’ or the ‘Tribunal’).
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