Failure of the Board of Tax Appeal (BOTA) to resolve a US$19.2 million “tax fraud” complaint brought against the Ministry of Finance (MOF) by Lonestar Communication Corporation, (LCC) prompted a Tax Court Judge to caution the Board’s existence, after reviewing the ruling.
BOTA was established in 2009 by the government to hear complains growing out of Ministry of Finance (MOF) audits of business and other tax payers.
In reviewing BOTA’s ruling in March 2014, Judge Mozart A. Chesson said, “the court must caution BOTA to remember that it is not a mediator, but an adjudicator, as complained by LCC.”
He went on to say that “BOTA directed the parties to “walk together” to resolve their differences. The parties came to BOTA, because they had been unable to resolve the differences,” adding, “They should not have dodged a responsibility that is the primary reason for Bota’s very existence: an obligation to reach a final decision.”
Judge Chesson concluded, “The appeal is hereby dismissed because of a lack of jurisdiction of this court to entertain a matter in which a final decision had not yet been rendered. The matter is remanded to BOTA for a resumption of its hearing.”
In January 2013, MOF informed LCC that its forensic investigation discovered that LCC during the period of 2007 to 2011, that LCC had engaged in a series of tax fraud, to the tune of US$19.2 million. The MOF had demanded that LCC made available its business records, in connection with 11 business transactions.
But, LCC objected, claiming that MOF already had given them a tax clearance for those years in question.
Lonestar filed an appeal to BOTA, requesting an emergency hearing.
But at the hearing, MOF did not produce the forensic evidence it relied on, when it accused LCC of tax fraud; nor did it submit or explain its calculation of the US$19.2 million re-assessed tax bill.
BOTA ordered the ministry to submit said evidence within 72 hours, so that LCC could access that information; Bota also ordered the two parties to work together over the next 30 days to resolve and dispute.
In that ruling, BOTA did not specify whether the parties were to return to them, after the 30 days with the result of their discussion.
It was based on that ruling that LCC prayed the Court for review.
In their complained, LCC argued that BOTA’s ruling was not in fact final, because it dispose of nothing, thereby leaving all issues unresolved, and no option than to appeal to the Court.
LCC further argued that charged with fraud as it was, the burden of proof rested on the ministry. The ministry, LCC pointed out, had failed to present and prove any of their allegations, when the case was brought before BOTA.