In Lonestar Million-dollar Tax Evasion Appeal

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The Tax Court on Wednesday, January 15, reserved judgment in a US$19.197 million case against Lonestar Communications Corporation, (LSCC), one of the leading GSM Companies in the country.

The case involved tax fraud—alleged against LSCC —following a re-audit and a re-assessment of Lonestar’s tax record, by the Finance Ministry. 

The Ministry had conducted a re-audit and a re-assessment of Lonestar’s tax record, alleging new discoveries of unreported income, indistinct expenses and unclear interconnectivity that led the Ministry of Finance to compute and claim a deficit (shortage) in the company’s past payment into government revenue, to the tune of US$19,197,903.44.

Lonestar protested and filed an appeal to the Board of Tax Appeals.

In its complaint to the Board of Tax Appeals, Lonestar argued that the Finance Ministry was wrong to assess said payment, based on an audited report and its re-assessment bill for “additional taxes, penalty, and interest for the taxable re-audited period 2007 to 2011.”

The corporation further argued that it had already paid its taxes for the period 2007 to 2011 for which the Ministry had issued it a tax- clearance.

Lonestar argued further there was no justification (excuse, good reason) for carrying out an additional re-assessment of the taxable period already assessed.

The Board’s intervention left Lonestar no better off, considering the amount the Ministry of Finance had re-assessed the nation’s leading cell-network provider. 

The Board gave Lonestar 30 days to commence working with the Ministry, to determine the tax-basis for the new-found documents and the difference they represent.

The Board also declared that if Lonestar failed to cooperate with the Ministry within a 30-days period, the previous determination of the Ministry’s 19 million wound be binding and enforceable against the company.

It was in view of that ruling, that Lonestar had prayed the Tax Court for a “Judicial Review” of the Board’s decision.

After lawyers representing the two parties on Wednesday rested from presentations of oral and documentary evidence, Presiding Judge, Mozart Chesson, announced he would reserve judgment.

He told lawyers representing the two parties (Government and Lonestar) that through a notice-of-assignment, the Court would provide the date for final ruling in the case.

The company had complained of the Ministry of Finance and the Tax Appeals Board, praying the Court to review the Board’s leaning.

(With an assist from Keith Neville A. Best, Esq.)

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