In two rulings featured in the Tax Appeal Tribunal's most recently reported decisions, Nigerian companies successfully overturned state tax assessments that examiners could not, or would not, justify with evidence. United Bank for Africa Plc had a N54,862,948.54 withholding tax assessment from the Ondo State Board of Internal Revenue Service thrown out because it rested on assumption rather than fact. Ecobank Nigeria Limited had a PAYE and withholding tax assessment from the Akwa Ibom State Internal Revenue Service invalidated after the tax authority refused to disclose how it arrived at an 'undisclosed income' figure, citing only 'intelligence sources.' Cited as (2026) 98 TLRN 21 and (2026) 98 TLRN 86, the two decisions set out in unusually direct terms what a state revenue authority may, and may not, do when it decides your own records are not enough.
The UBA case: an estimate is not a guess
Ondo State's tax authority issued a Best of Judgment assessment against UBA covering withholding tax it said was due on commissions paid to point-of-sale agents in 2019 and 2020. The bank maintained it had supplied comprehensive documentation throughout the investigation, including agent details, transaction records and remittance evidence. The tribunal agreed with UBA and set the assessment aside. Its reasoning matters more than the outcome: a tax authority may issue a Best of Judgment assessment when a taxpayer fails to cooperate, but that assessment must rest on available information and reasonable estimation, not on what the tribunal described as guesswork, phantom assumptions or arbitrary figures. An estimate has to show its working.
The Ecobank case: no disclosure, no assessment
Akwa Ibom State's revenue authority went further in the second case, issuing a revised PAYE and withholding tax assessment against Ecobank that included an additional 'undisclosed income' component. When the bank asked how the figure was calculated, the authority declined to say, pointing only to 'Intelligence Sources.' The tribunal was unpersuaded. It held that a tax authority has an obligation to disclose the basis of an assessment once a taxpayer challenges it, and that refusing to do so, even by invoking confidential sources, breaches the taxpayer's constitutional right to fair hearing under Section 36(1). Both the PAYE and withholding tax components were invalidated on that basis. Transparency, in other words, is not optional once a dispute is joined.
Why this matters well beyond two banks
These rulings land at a pointed moment. Nigeria's revenue authorities collected N21.6 trillion in the first half of 2026, up 49 per cent year on year, and the Nigeria Revenue Service is chasing a N40.7 trillion full-year target. That pressure runs downhill: state Boards of Internal Revenue, which independently assess PAYE and withholding tax and are not part of the NRS's national digitalisation push, are under similar pressure to raise collections, and Best of Judgment assessments are one of their most-used tools whenever a company's documentation is judged incomplete. This is routine exposure for any business with payroll, contractor payments or agent commissions running through more than one state, not just banks, from oil and gas service companies and construction contractors to agribusinesses and NGOs facing PAYE queries on their staff. The UBA assessment itself concerned 2019 and 2020 transactions only decided in 2026, a reminder that these disputes can surface years after the fact.
What this means for your business
Treat both rulings as a practical checklist. First, keep primary documentation, agent and vendor payment schedules, remittance evidence and withholding tax credit notes, on file well beyond the year of transaction, since a state authority can query a payment several years later. Second, when a Best of Judgment or revised assessment arrives, request its basis in writing immediately; a refusal, or a vague reference to undisclosed intelligence, is now itself a ground for challenge rather than a dead end. Third, resist the instinct to settle a disputed assessment quietly to avoid friction with a state tax office. Where the authority cannot show its workings, the tribunal route has real teeth, and both of these companies used it successfully. Finally, if you operate across several states, expect inconsistency in how aggressively each Board of Internal Revenue assesses, and build one internal documentation standard robust enough to meet any of them the same way.
VOG Global Consult helps Nigerian businesses respond to Best of Judgment and revised state tax assessments, assemble the documentation tribunals expect, and pursue appeals where an assessment cannot show its basis. If a state tax office has issued you an assessment you cannot get an explanation for, speak to us before you pay it. Suite 060 to 061, Orago Complex, Area 10, Garki, Abuja.