Court halts $3.66m tax order against Elumelu-linked AEDC

Abuja Electricity Distribution Company (AEDC) has secured a major reprieve after a Federal High Court in Abuja set aside a ruling that required the utility to pay N5.31 billion ($3.66 million) in tax liabilities to the Federal Inland Revenue Service. The company, which operates under Transcorp Power Plc, linked to Nigerian businessman Tony Elumelu, had challenged last year’s ruling by the Tax Appeal Tribunal.

Justice Umar Mohammed, who delivered the new judgment, said the earlier decision was tainted by “bias” and lacked the essential elements of a fair hearing. He ordered the case to be returned to the tribunal for a fresh trial, effectively pausing the enforcement of the earlier tax demand. His ruling resets a dispute that has been running for years and gives AEDC another chance to argue its case before the tax panel.

AEDC protests long-running tax dispute

The dispute stems from a Dec. 14, 2023, tribunal judgment that directed the distribution company to settle outstanding Value Added Tax and Withholding Tax obligations dating back to 2013. AEDC had argued that the tribunal’s decision was flawed, filing suit No: FHC/ABJ/TA/01/24 to ask the Federal High Court to overturn the ruling.

In its filing, the company said that enforcing the alleged liabilities could disrupt electricity supply to millions of customers across the Federal Capital Territory and the states of Kogi, Nasarawa and Niger. The company also raised concerns about the role of a tribunal member, Ajayi Julius Bamidele, who previously worked at the FIRS and, according to AEDC, had taken part in decisions tied to the company’s tax audit.

AEDC argued that this background created an appearance of conflict. The FIRS rejected this claim, saying the distributor should have raised the issue during the tribunal proceedings rather than after judgment had been delivered. The agency maintained that its tax assessments were valid and backed by audit work supported by consultants.

Before approaching the High Court, AEDC had faced a five-member Tax Appeal Commission panel led by presiding judge Iriogbe Alice. That panel ruled that the company owed N4.53 billion ($3.12 million) in VAT between 2013 and 2017, along with N780.3 million ($530,000) in WHT for 2013 and 2016. The tribunal cited findings from KPMG, which served as consultant to the FIRS. AEDC disputed the figures, arguing that the tax authority had not provided a lawful basis for the liabilities after a joint investigation by the FIRS and the Economic and Financial Crimes Commission in 2018.

AEDC faces layoffs, ownership and compliance pressures

While the legal fight continues, the company has been undergoing significant internal changes. Earlier this month, roughly 800 workers were notified that their jobs would be terminated—one of the largest single-round layoffs by a Nigerian power distributor in recent years. The notices, issued beginning Nov. 5, have added pressure to an already strained labor market and created anxiety for households dependent on the affected workers.

AEDC operates as part of Transcorp Power, which holds a 50.99 percent stake through Transnational Corporation Plc. Corporate filings also show that Jeolan International Limited owns 60 percent of the distributor. In recent years, the company has drawn heightened attention from regulators. In April 2024 the Nigerian Electricity Regulatory Commission fined the distributor N200 million ($139,000) for overbilling customers outside Band A—one of several compliance issues the company has had to address.

The court’s decision now gives AEDC a temporary lift as it manages both regulatory pressure and internal restructuring. But the tax case is far from over, and the next round at the tribunal will determine whether the company ultimately faces a multibillion-naira bill or secures a clean break from the earlier assessment.