The Abuja Electricity Distribution Company has won a temporary respite in its long-running tax battle with the Federal Inland Revenue Service, after a Federal High Court in Abuja set aside a ruling that demanded the power distributor pay N5.31 billion ($3.66 million) in alleged tax arrears.
Justice Umar Mohammed held that last year’s decision by the Tax Appeal Tribunal failed to meet the basic standards of fair hearing and was influenced by what he described as “elements of bias.” The judge ordered the case to return to the tribunal for a fresh hearing, pausing the enforcement of the tax bill while the dispute continues.
The fight dates back to December 2023, when the tribunal ruled that AEDC owed billions in outstanding Value Added Tax and Withholding Tax obligations for periods between 2013 and 2017. AEDC challenged the ruling under suit no. FHC/ABJ/TA/01/24, arguing the tribunal’s findings were flawed, excessive, and based on positions that lacked lawful justification.
The company also raised concerns that a tribunal member, Ajayi Julius Bamidele, a former FIRS employee, had previously taken part in work involving AEDC’s tax audit, creating what it called a clear conflict of interest. The FIRS countered that the objection came too late and insisted its tax assessments were properly backed by a KPMG-led audit and earlier investigations by the EFCC.
Prior to the court intervention, the tribunal had assessed AEDC as owing N4.53 billion ($3.12 million) in VAT and N780.3 million ($530,000) in WHT. The company warned that forcing immediate payment would disrupt electricity supply to millions of residents across Abuja and parts of Niger, Kogi and Nasarawa.
The ruling comes at a period of significant upheaval inside AEDC. Earlier in November, the company launched a sweeping workforce reduction that affected about 800 employees — one of the largest single layoffs recorded in Nigeria’s privatised power sector.
The firm has also faced regulatory scrutiny. In April 2024, the Nigerian Electricity Regulatory Commission fined it N200 million ($139,000) over widespread overbilling complaints outside the top tariff band.
AEDC is majority-controlled by Transcorp Power Plc, part of billionaire Tony Elumelu’s Transnational Corporation group, while Jeolan International Limited is listed as holding a 60 percent stake.
For now, the latest court order relieves immediate pressure on the utility, but the next hearing at the tax tribunal will determine whether AEDC walks away or ends up liable for billions of naira. The outcome could shape how aggressively tax authorities pursue legacy assessments across Nigeria’s electricity sector.
