Several rulings by the Board of Tax Appeals (BOTA) have been seriously challenged at the Tax Court by a number of taxpayers.
BOTA was established in 2009 to provide taxpayers and taxing authorities (Ministry of Finance) with an accessible, fair and efficient appeal process and to resolve appeals in a timely and judicious manner.
But some of the taxpayers such as DHL Limited and Lone Star Communications Corporation (LSCC) have already filed a motion for “Judicial Review of Tax Determination” against BOTA.
In DHL’s case, they alleged that the Ministry of Finance (MOF) audited the institution covering the period 2007, 2008, 2009 tax bills in the amount of US$328,678.98.
In that audit, DHL's operating expense totaling US$473, 474. 86 was not acceptable as a valid deduction for lack of supporting documents.
MOF disallowed it and added the expenses of the deductible to the revenue of DHL for each of the period audited.
DHL then requested the Ministry to provide particulars of the transaction for the tax period audited that it deemed unacceptable deduction expenses.
The company even asked the Ministry to provide a list of specific transactions to allow for the offering of supporting documents in order to substantiate whether the Ministry’s claims truly exist.
That request was rejected by the MOF.
It was this rejection that led DHL to complain to BOTA.
During the hearing at the BOTA, DHL argued that the Ministry’s failure to provide particulars (that would enable it identify the disallowed transaction) and its request to enforce the collection of its controversial audit should be denied and dismissed.
Also requested was that BOTA order the Ministry to provide to DHL details requested to substantial whether or not the MOF claims were genuine.
Despite the evidence, BOTA ruled against DHL, stating that the “Ministry provided the taxpayer the reasonable reference used to disallow the taxpayer operating expense.”
In the case of Lone Star, the company claimed that BOTA erroneously ruled confirming that Lone Star should make payment in the MOF’s audit report and its re-assessment bill for additional taxes, penalties and interest for the taxable period 2007 to 2011, to the tune of US$19,197,903.44.
The cases are pending before the Tax Court for determination.