On appeal against a lower court’s decision, Liberian Government tax authorities and one of Liberia’s leading GSM Company Lonstar Cell are locked down in a heated battle at the Supreme Court over disputed taxes in millions of dollars covering 2007 to 2011.
According to the legal team representing Lonestar Cell the matter at hand grew out of a determination by the Finance Ministry’s revenue department, now the Liberia Revenue Authority or LRA which demanded a third assessment of the company’s books over claim that it had evidence that the government had been defrauded of $19m in taxes.
During a hearing on Wednesday, 30 March, the company’s lawyers indicated how the third assessment request was resisted on grounds that it was “way outside” the five years period and not supported by statutes, arguing that the government had conducted first assessment and secured over $1m before conducting a second assessment that secured an additional $700,000.
Before the matter reached the Tax Court, Lonestar Cell said it took appeal before the Board of Tax Appeals or BOTA in 2013 which then instituted a reconciliation committee that later resolved to deduct $5m that Lonestar Cell had allegedly paid to a company called PLC from the $19m.
With this reduction by the reconciliation committee, Lonestar Cell was then due $13m in taxes to government as per the determination reached, instead of the $19m, though one of the company’s lawyers Cllr. Frederick Cherue says there was no agreement by both parties.
When the matter was taken before the Tax Court at the Temple of Justice, the court ruled in favor of the government; but Lonestar Cell’s lawyers claimed that the lower court erred. But the State lawyers are contending that in the first and second assessment, they could not have accused the GSM company of fraud based on the information received, particularly given that the company had to self-declare before government made determination of the taxes due.
Based on information provided by the company, the government says the first discovery was $1m plus and the second about $700,000. But it says when it was determined by authorities that the company had not provided certain information, government then requested a third assessment on grounds that the company had allegedly defrauded it of $19m.
State lawyers informed the court that after informing the mobile giant of its determination of $19m, the company had 30 days as of the receipt of the communication to file their appeal with BOTA, but failed to do so in the time frame provided it.
But the counsels for Lonestar Cell are contending that state lawyers sat on their rights and did not raise any issue and that time had passed. The government says it had requested 30 percent payment before even going into the discussion with Lonestar Cell, but argued that BOTA disregarded it and went through the investigation.
The ongoing matter has raise concern from Chief Justice Francis S. Korkpor, Sr., wondering why tax authorities are not taxing but are rather asking companies to self-declare before being taxed. The government is still insisting that the Supreme Court should make determination about the $19m instead of the $13m, alleging that BOTA erred and could not have subjected the parties to reconciliation.
They therefore requested that the Supreme Court affirm the Tax Court’s ruling in keeping with the laws. The Supreme Court has reserved its ruling.
By Winston W. Parley-Edited by Othello B. Garblah