A CRITICAL ANALYSIS OF THE POWERS OF THE TAX APPEAL TRIBUNAL UNDER THE FEDERAL INLAND REVENUE SERVICE ACT, 2007 IN THE SETTLEMENT OF TAX DISPUTES IN NIGERIA.
A critical appraisal of the powers of the Tax Appeal Tribunal (TAT) in the settlement of Tax disputes in Nigeria stems from the fact that taxation is fast becoming the pivot and bane of Nigeria’s Development. This research examined the legal frame work that established and clothed this tribunal with powers, functions and jurisdiction of the TAT.The limitations which possess as challenge to the operation of the TAT was highlighted. These are the jurisdictional conflict between the TAT and the Federal High Court, composition of the members of the TAT in the light of Section 36(1) of the 1999 Constitution (As amended), the insertion of an ouster clause preventing one from challenging the propriety or otherwise of the appointment of a Tax Commissioner and the limited right of Appeal to the Federal High Court on points of Law.The Research also examined laws on the defunct Body of Appeal Commissioners (BAC) and Value Added Tax Tribunal (VAT-T) the predecessor bodies to the TAT with a view to distinguishing them from the TAT, the application of the legal frame work on the operation of the TAT, establish findings and make recommendation on problems and challenges. Also discussed was the reason for examining the powers, functions and jurisdiction of the TAT. This is so because of the fact that this body has a lot to contribute in enhancing the revenue profile of the government in amicable settlement of tax disputes. Therefore, this research x-rayed the problems and challenges facing the TAT and proffer suggestions in tackling these problems which will better place the tribunal as a mechanism of tax compliance. The Research is doctrinal in nature using primary and secondary authorities. This study made some findings which pose as serious challenges to the smooth operation of the TAT. These are: the constitutional conflicts between the TAT and the Federal High Court over taxing and revenue matters of the Federal government in the light of the exclusive jurisdiction of the Federal High Court as seen in Section 251 of the 1999 Constitution(As amended), constitionality of the composition of the TAT, the insertion of an ouster clause which ousts the jurisdiction of the court of law from entertaining any question with regards the validity or otherwise of the appointment of a TAT Commissioner and Appeal from the TAT to the Federal High Court on points of Law. These challenges have continued to elicit legal actions before the various courts in Nigeria. Recommendations have also been proffered such as an amendment to the Federal Inland Revenue Service (Establishment) Act, 2007 and the Federal High Court Act, 2005 to make the TAT a division of the Federal High Court with the both judges and non-judges who will sit as Assessors in the tribunal, hence an amendment to paragraph 2(1) of the Fifth Schedule to the FIRS (Est.) Act removing the appointment from the Minister of Finance to a committee from Ministries of Finance and Justice. The removal of the ouster clause in paragraph 8 of the Fifth Schedule and making appeal lie directly from the TAT to the Court of Appeal
CHAPTER ONE GENERAL INTRODUCTION
1.1. Background to the Dissertation
The importance of taxationto any Nation of the World cannot be overemphasized. It is a fact that there is a paradigm shift among the developed and developing economies from reliance on oil revenue to taxation due to the uncertainty of sale in the International market.1 In Nigeria today, the federal government is trying to open all other sectors of the economy especially the Manufacturing and the Agricultural sectors in other to boost the revenue profile of the economy. It is worthy of note that taxation remains a veritable instrument for National Development. It has been the major source of revenue for government in providing socio-amenities and infrastructuresuch as roads, pipe borne water, schools, rail way, electricity to mention a few.The government has also used taxation as an instrument of fiscal policy in the redistribution of wealth and stimulation of economic growth by creating jobs2.
Historically, after the Nigerian civil war, indigenous and foreign businesses began tothrive, disputes arising from taxationbegan to increase, thus prompting the Federal government to create the Federal Revenue Court3as a specialized court to address issues bothering on the Revenue of the Federation. Shortly thereafter, the court was restyled as Federal High Court by Section 230(2) of the Constitution of the Federal Republic of Nigeria,1979.The enlargement of the
1Okonjo-Iweala, N (2012),Reforming the Unreformable Lessons from Nigeria, The MIT Press, Cambridge, Massachusetts London,England,p3-“The surge in oil production in the 1970s,in conjunction with the oil shock, had profound effects on the shape and structure of Nigeria‟s economy and also on its politics .A diversifying economy before 1970,Nigeria quickly turned into a monoculture economy based on oil”. 2 Musgrave, R.A & Musgrave, P.B (1976),Public Finance In Theory And Practice(2nd Edition),McGraw-Hill Kogakusha Ltd, United States,p.210-“Requirement for a „Good” Tax Structure. Among them, following are of major importance, although they are not meant to be all-inclusive:. . .The tax structure should facilitate the use of fiscal policy for stabilization and growth objective . . .” 3No.13 of 1973
jurisdiction of this court to accommodate other subject matters though within the exclusive list stalled the quick resettlement of tax dispute.As a result, this work appraises the Tax Appeal Tribunal(TAT) as a child of necessity which seeks to complement the efforts of the Federal High Court.
Considering the enlarged jurisdiction of the court as provided by Section 251 of the Constitution of the Federal Republic of Nigeria,1999 (As amended) in entertaining and adjudicating on both civil and criminal matters, the court has continued to suffer congestion of caseswhich has slowed down the wheel of justice with respect to quick disposal of tax cases. Therefore, the Tax Appeal Tribunal(TAT) has been established to fill the vacuum created by the Federal High Court which has led to the loss of government revenue.
Moreover, with the formulation of the National Tax Policy of Nigeria, emphasis is now placed on an efficient tax system that encourages a formidable tax dispute resolution system. Mindful of the economic importance of taxation, the Federal government, created the Tax Appeal Tribunal (TAT) through the Act of the National Assembly to entertain tax disputes and resolve them amicably using practice directives similar to that used by the court of law in other to ensure fairness and equity.For this reason, the Tax Appeal Tribunal (TAT) came into existence through the Federal Inland Revenue Service (FIRS) Establishment Act,2007 and the Tax Appeal Tribunal (Establishment) Order,2009.Section 59 (1) of the FIRS(Establishment)Act, 2007 provides for the establishment of the Tax Appeal Tribunal (TAT) as a dispute resolution Agency for all tax matters within the jurisdiction of the Federal Government with respect to taxes collected by the Federal Government as contained in the exclusive list of the Constitution of the Federal Republic of Nigeria, 1999(As amended). These taxes are assessed, collected and accounted for by the
Federal Inland Revenue Service (FIRS), in who‟s amended Act contains the Tax Appeal Tribunal (TAT).
The relevant statutory provisions the Tax Appeal Tribunal (TAT) is meant toresolve disputes with respect to the following:4
i) Federal Inland Revenue Service (Establishment) Act,5
ii) Companies Income Tax Act,6
iii) Petroleum Profit Tax Act,7
iv) Personal Income Tax(Amendment) Act (as it applies to the armed forces, police, foreign affairs, residents of the FCT & Non-residents).8
v) Value Added Tax Act,9
vi) Stamp Duties Act,10
vii) Taxes and Levies(Approved List for Collection)Act,
viii) Capital Gains Tax11; and
ix) Regulations, government notices or rules issued in terms of these legislations.
In addition, Withholding tax, Education Tax (Now Tertiary Education Trust Fund Act),Deep Offshore and Inland Basin Production Sharing Contracts Act, the National Technological Development Levy, Oil Exploration License, Oil Mining license, Oil Production License,
4 First Schedule to the Federal Inland Revenue Service (Establishment) Act, 2007. 5 Ibid. 6 CAP. C21 Laws of the Federation , 2004 7 CAP. P10 Laws of the Federation, 2004 8CAP.P 8,Laws of the Federation of Nigeria,2004 (As Amended in No.20 of 2011) 9 CAP. V1 Laws of the Federation, 2004 10 CAP. S8 Laws of the Federation, 2004 11 CAP.C 1Laws of the Federation,2004
royalties and rents are also to be collected by FIRS.12It is no historical accident that the first Federal Court of first instance to exercise original jurisdiction over matters relating to taxation within the federal jurisdiction was the Federal Revenue Court13.
The Federal High Court had a chequered existence since its establishment as a court.14 The Court by Section 230(2) of the Constitution15 was vested with more powers to exercise jurisdiction to the exclusion of any other Court in civil and criminal causes, and matters arising from the exclusive list. However, the powers of the Federal High Court was no longer limited to taxation, customs and excise duties, banking, currency and fiscal measures but to other issues as listed in the exclusive list.
After the oil boom of the 1970s, disputes in tax matters doubled and since the Federal High Court had more additional matters to revenue issues, the court could no longer adequately attend to tax and revenue issues, hence, the delay and never ending of disputes. To ameliorate the judicial inadequacies in prompt adjudication and settlement of tax disputes and other related matters, the Personal Income TaxAct,16 the Companies Income Tax Act17and the Petroleum Profit Tax Act18 established the Body of Appeal Commissioners (BAC) to entertain and resolve disputes arising from Companies Income Tax, Petroleum Profit Tax, Capital Gains Tax and Personal Income Tax matters within the country while the Value Added Tax Act19 was no exception as it created the Value Added Tax Tribunal (VAT-T).
12 See Okauru, I.O (2012),A Comprehensive Tax History of Nigeria, Safari Books Limited,Ibadan,Nigeria,p.124 13This was promulgated by Decree No.13 of 1973. 14Ojukwu, E. &Ojukwu, C.N. (2005), Introduction to Civil Procedure,(2nd Edition);Helen-Roberts Ltd,Abuja,Nigeria,pg.35. “According to its enabling law (Decree No.13 of 1973) the court “shall have original jurisdiction in certain specific matters including taxation of companies, customs and excise duties, banking, foreign exchange ,currency and fiscal measures of the Federal government. . .” and “admiralty jurisdiction”. 15 Constitution of the Federal Republic of Nigeria, 1979. 16 No.104 of 1993 (Now amended by Act 20 of 2012) 17CAP.60,Laws of the Federation of Nigeria,1990 18CAP.354,Laws of the Federation of Nigeria,1990 19No.102 of 1993.
ThisResearchwill appraisethe Tax Appeal Tribunal (TAT) as a child of circumstances which seeks to complement the efforts of the Federal High Court. Considering the enlarged jurisdiction of the court as provided by the Section 251 of the Constitution of the Federal Republic of Nigeria, 1999 (As amended) in entertaining and adjudicating on both civil and criminal matters within the exclusive list, the court has continued to suffer from congestion which has slowed down the wheel of justice with respect to disposing off tax disputes. The Tax Appeal Tribunal(TAT) has been established to bridge the gap exposed by the inadequacies of the Federal High Court which has led to the loss of government revenue. The incessant delay in court proceedings has made the government unable to timeously recover accumulated tax arrears and prosecute tax defaulters. Official statistics have revealed that lots of tax payers both in private and in public especially, Ministries, Departments and Agencies(MDAs) are owing billions of naira in government revenue due to non-remittance. This in turn has affected government‟s provision of basic socio-amenities and infrastructure.
The government‟s robust anddynamic approach to the resolution of tax disputes in Nigeria is the establishment of the Tax Appeal Tribunal (TAT)as provided in the FIRS (Establishment) Act,2007 which to a large extent has been able to settle tax disputes amicably and recover tax arrears for the government.
This research will examine what tax appeal entails as a tool in the hand of the tax payer in triggering the process of resolving tax issues from the filing of an objection to assessments raised by the tax authority before the Tax Appeal Tribunal (TAT) through to the Supreme Court of Nigeria.
More also, an examination into the dispute mechanisms provided for in the various tax regimes such as the Body of Appeal Commissioners (BAC) and Value Added Tax Tribunal (VAT-T)
which hitherto were thrown into oblivion would be discussed. A comparative analysis of the Appeal process under the Tax Appeal Tribunal (TAT) on the one hand and the Body of Appeal Commissioners (BAC) and the Value Added Tax Tribunal (VAT-T) on the other hand would be succinctly treated. Finally, this Research will examine the composition, jurisdiction, powers and function, authority and procedure of the Tax Appeal Tribunal (TAT) viz-a-viz those of the Federal High Court in entertaining tax matters as a court of first instance. 1.2Statement of the Problem.
In critically appraising the powers of the Tax Appeal Tribunal (TAT) in the settlement of tax disputes in Nigeria under the present legal frame work,20 allusion has been drawn from the abrogated tax tribunals-Body of Appeal Commissioners(BAC) and the Value Added Tax Tribunal (VAT-T) which hitherto were in operation prior to the creation of the TAT. Nevertheless, these tribunals could not achieve their objectives due to poor legal frame work establishing them. The likely issues which posed `as limitations to the powers, functions, jurisdiction and operation of the defunct tribunals as stated earlier also pose as serious threat to the Tax Appeal Tribunal which is presently in operation in Nigeria. In view of the foregoing, this research has formulated the following research questions:
a. Whether there is conflict of jurisdiction over tax matters and revenue of the federal government between the Tax Appeal Tribunal and the Federal High Court?
b. Is there a Conflict in the composition of the Tax Appeal Tribunal in the light of Section 36(1) of the Constitution of the Federal Republic of Nigeria,1999(As amended)?
c. Whether the insertion of the Ouster Clause which seeks to prevent legal action against the propriety or otherwise in the appointment of a Commissioner of the Tax Tribunal is
20.Federal Inland Revenue Service (Establishment) Act,2007
contrary to the provisions of the Constitution of the Federal Republic of Nigeria,1999(As amended)?
d. Whether the restriction of Appeal from the Tax Appeal Tribunal to the Federal High Court on point of Law is constitutional?
1.3 Objectives of the Dissertation
1. One of the objective of this dissertation is to show that there is a conflict of jurisdiction over tax matters and the revenue of the federal government between the Tax Appeal Tribunal and the Federal High Court.
2. Another objective of this dissertation is to highlight the conflict in the composition of the TAT in the light of Section 36(1) of the Constitution of the Federal Republic of Nigeria.
3. To x-ray and show that the insertion of the ouster clause which seeks to prevent legal action against the propriety or otherwise in the appointment of a member of the tribunal is contrary to the words and spirit of the 1999 constitutions (As amended).
4. This dissertation will discuss the restriction of Appeal from the TAT on points of law to the Federal High Court which hitherto is unconstitutional.
5. Finally, the dissertation will provide recommendation to address the aforementioned constitutional limitations as they relate to the jurisdiction and functions of the said tribunal.
1.4 Justification of the Dissertation
(a) The reason for the study of the Powers of the Tax Appeal Tribunal (TAT) under the Act in the settlement of Tax disputes in Nigeria is to establish the fact that this tribunal has enhanced
the revenue profile of the Federal government by its speedy adjudication and disposal of tax cases that has been brought to it.
There are plethora of cases between tax payers and tax authorities which have been amicably resolved through rulings that have added to enrich our tax jurisprudence. Forexample,in the case of Oando Supply and Trading Ltd v FIRS21 where the main issue before the tribunal was:Whether the Appellant, a taxpayer, can commence an appeal at the Tax Appeal Tribunal against a tax assessment while the objection to the assessment has not been resolved by the tax authority.The tribunal held that the Respondent(FIRS) must issue the Notice of Objection to Amend within a reasonable time-90 days failure within reasonable time would amount to “deemed decision”.
(b)Another reason for this dissertation is to establish the fact that the TAT in settlement of disputes has become a tool for tax compliance.22 The tribunal which has been empowered by law to resolve disputes arising from the Personal Income Tax, Companies Income Tax, Capital Gains Tax, Stamp Duties, Petroleum Profit Tax, Value Added Tax and other regulations has in many respect exercised jurisdiction over these matters.This has in turn boosted our revenue yield for Nigeria.
(c)Another justification for this dissertation is to showcase the conflict ofthe powers of this tribunal in exercising jurisdiction over taxing matters with that of the Federal High Court. The constitution23 has given exclusive jurisdiction to the Federal High Court to exercise judicial
21(2011)4 Tax Law Report of Nigeria, p. 141 ( Held at TAT, Lagos Zone). 22 See; Two cases where the TAT has been instrumental to the recovery of taxes. Firstly,Kellog Brown & Root vs. FIRS (Unreported) Suit No: TAT/LAG/APP/25/2012. Before the TAT, the taxpayer paid the sum of Three Million Six Thousand dollars ($3,006,000) as full and final settlement of their tax liability to government., See also the case of FIRS vs. Industrial General Insurance Co. Ltd.(Unreported) Suit No: TAT/LAG/APP/10/2011, where through the intervention of the TAT, Lagos the Respondent has paid the sum of Two Hundred & Five Million (N205,000, 000. 00) to the Federal Government.
23 Constitution of the Federal Republic of Nigeria, 1999 (As amended in 2011-2012).See the decision of the Federal High Court in TSKJConstruces Internationals Sociadade LDA vs. FIRS
powers of adjudicating on the subject matter of taxation. Against this back drop, the study shall make its findings and recommendation. 1.5 Scope of the Dissertation This dissertation is limited to the establishment, jurisdiction, composition, powers and functions of the TAT in adjudicating on disputes arising from taxation within the Federal Administrative System in Nigeria. Secondly, though violations of the various tax legislations may be classified into civil and criminal, this study will only focus on the civil aspect since the TAT can only exercise jurisdiction over civil matters. Thirdly, the study reviewed the operations of the defunct tribunals – the Value Added Tax Tribunal and the Body of Appeal Commissioners where were dissolved to pave way for the TAT.
Finally, the FIRS (Establishment) Act24, TAT (Procedure) Rules25, TAT (Establishment) Order26 which provides for the subject matter jurisdiction and guidelines for the operation of tribunal was used in this work.
1.6 Research Methodology
(Unreported)SuitNo:FHC/ABJ/TA/8/12 delivered on the 30th October,2013 where the court construed the operations of TAT as being in conflict with the exclusive jurisdiction of the Federal High Court and declared the TAT‟s establishment and operation as a nullity. 24 2007. 25 2010 26 2009
The research is based on doctrinal method. Both primary authorities (such as case laws and statutes) and secondary authority (such as articles, journals, and textbooksetc.) were used. Conference and Seminars papers were also used. 1.7 Literature Review
There are many writings on it. One of the writers,Arogundade, J.A,27In his book wrote on Appeal Process and Nigerian Income Taxation where he discussed on how appeals are triggered by the tax payer to the BAC and the VAT-T by the tax payer and the tax authority. Also, he discussed the establishment, jurisdiction, composition and structure of the TAT in this book. Nonetheless, this work did make some reservation to the author‟s statement in page 363 of his book under the sub head of Jurisdiction of the TAT where he states as follows: „The inclusion of the PIT among the taxes to be determined by the TAT is not very clear yet.’ On this point, it should be emphasized that the amended Personal Income Tax Act has clearly provided that the TAT has jurisdiction to entertain all issues arising from Personal Income Tax whether it emanates from FCT or the States Internal Revenue even though they are being administered by the States, the Personal Income Act is still a Federal law.
Moreover, Arogundade in his book only mentioned one of many lacunae in the operation of TAT which has to do with Appeal against the tribunal on points of law to the Federal High Court. On the other hand, this research discussed several issues which bothered on the Exclusive jurisdiction of the Federal High Court on issues of Revenue and Taxation and the issue of appointment of the TAT commissioners which is in conflict with the Constitution28.
27(2010).Nigerian Income Tax & Its International Dimension, 2nd Edition (Spectrum Books Limited, Ibadan, Nigeria) p.353. 28 Constitution of the Federal Republic of Nigeria, 1999 (as amended in 2011 – 2012).
Another writer is Amucheazi, O .D29 who in his seminar paper highlighted the jurisdictional issues in TAT disputes succinctly analyzed the powers, composition and jurisdiction of the TAT as legally defective and unconstitutional as usurping the powers of the Federal High Court which has exclusive jurisdiction over and above any court or tribunal with regards to issues relating to taxation. The author delved into salient issues of the composition of the tribunal, unconstitutionality of the ouster clause as embedded in the establishment provision of the TAT.
This dissertation however, will examine the Body of Appeal Commissioners(BAC) which was provided by the various tax statutes30and the Value Added Tax Tribunal (VAT-T)31 by discussing the establishment, powers, functions and jurisdiction of these tribunals. The jurisdictional limitation to these dispute resolution tribunals would be highlighted in order to do a comparative study between the TAT on one hand and the BAC and the VAT-T on the other hand.
Another legal luminary, Ibegbu, N.32 in his Paper, had a contrary view of the establishment of the TAT, stating that Section 251 of the Constitution33 though excludes other courts from hearing and determining matters arising from taxation, it did not exclude tribunals, and hence the TAT is constitutional. On the other hand this work tried to interrogate the above learned author‟s position by citing the disparity in the TAT Establishment provision where it describes the
29(2011),Jurisdictional Issues in Tax Appeal Tribunal Disputes, Being a paper presented at a 5 Day Training Workshop on the Practices & Procedure of the Tax Appeal Tribunal at Hawthorn Suites, Area 11, Garki, Abuja,28th February -4th March,2011. 30 Personal Income Tax Act No.104,1993;Companies Income Tax Act, CAP C21,Laws of the Federation,2004 & Petroleum Profit Tax Act, CAP P10,Laws of the Federation of Nigeria,2004 31 CAP.V1 Laws of the Federation of Nigeria,2004 32(2011), Tax Appeal Tribunal Practice & Procedure; Being a paper presented at a 5 Day Training Workshop on the Practices & Procedure of the Tax Appeal Tribunal at Hawthorn Suites, Area 11 Garki, Abuja,28th February -4th March,2011. 33 Constitution of the Federal Republic of Nigeria,1999 (As amended).
tribunal as Court. See paragraph 20(3) of the Act34 which states that all proceedings before the TAT shall be deemed to be a civil court.
In his Seminar paper, Idornigie, P.O 35, observed thus: The question that emerges from the above provisions is whether the jurisdiction of the TAT is not in conflict with the exclusive original jurisdiction of the Federal High Court pursuant to Section 251(1) of the Constitution of the Federal Republic of Nigeria,1999(As Amended)?Again, going by the provisions of Section 59 of the Act and the Fifth Schedule, whether the TAT is not constituted to usurp the original jurisdiction of the Federal High Court? As shown above, the TAT has repeatedly declared itself to be administrative body performing quasi-judicial functions. Upon examination of the functions of the TAT and the effect of the provisions of the Act which has made the Federal High Court to sit as an appellate court on tax matters(rather than as a court of original jurisdiction),one might be tempted to argue that there is a conflict…. From the above, the learned professor argues that there is conflict of jurisdiction between the Tribunal and the court because the Federal High Court is expected to sit as an appellate court. The Researchers in this area, though agree to an extent as regards the conflict with the Federal High Court with regards to Section 251 but disagrees with the assertion of the learned Professor that the conflict Centre on the TAT exercising original jurisdiction. The TAT Establishment Act provided that parties may proceed to the Federal High Court to hear and determine any dispute relating to tax matters without first coming before the TAT. Therefore the Federal High Court could also exercise both original and appellate jurisdiction.
The Act36 is the main legal frame work on which the study examined the establishment, structure, jurisdiction, powers and functions of the TAT in the First and Fifth schedule of the
34 The Fifth schedule to the FIRS(Establishment)Act,2007 35Idornigie,P.O(2012),The Role of the Tax Appeal Tribunal(TAT) in Nigeria‟s Tax Jurisprudence; A Paper presented at the 2 Day Capacity Building Interactive Workshop on Tax Laws, Ethics and Judicial Interpretation for Superior Court Judges and Senior Tax Legal Officers organized by the Federal Inland Revenue Service in collaboration with the Nigerian Institute of Advanced Studies and JUK Igwe‟s Chambers on at the Kano Hall, Transcorp Hilton, Abuja, Nigeria, Tuesday 18th December.
Act37.Furthermore, the TAT Procedure Rules 38 were cited throughout the work as it supports the legal frame work. Nevertheless, this work critiqued the aforementioned Act in not providing for a proper organizational structure within the administrative operations of the TAT.The various tax legislations such as the Companies Income Tax Act, Personal Income Tax Act, Value Added Tax Act and Petroleum Profit Tax Act were examined for making comparisons between the TAT and the defunct BAC and VAT-T.
This study also took a closer look into the judicial authority of Stabilini Visononi v. FBIR39 at the Court of Appeal which brought a turning point in the history of dispute resolution in the tax system. One of four salient issues raised before the Court of Appeal was: Whether the VAT tribunal was right to have assumed jurisdiction to hear the matter in view of Section 1 of the Constitution40. The court stated that the VAT-T did not have the jurisdiction to entertain any matter concerning the revenue or taxation of the Federation since the Federal High Court has been vested with such powers by the constitution-“where the constitution .. has vested jurisdiction in a court of law, it cannot be lightly diverted…”. The court went further to state that unless there is a constitutional amendment to Section 251 of the constitution, taking away the exclusive power of the Federal High Court, the VAT tribunal jurisdiction is an infringement on the constitution. There is no doubt that this decision and many others led to the abolition of both the VAT tribunal and the BAC and eventually the creation of the TAT.
36 Federal Inland Revenue Service (Establishment) Act,2007 37 Ibid. 38 2010 39(2009)13 NWLR(Pt.117)p.9 40 Constitution of the Federal Republic of Nigeria. 1999(As amended in 2011 – 2012).
Also on the decision of the TAT in Federal Inland Revenue Service v. General Telecom Plc.41, the TAT in over ruling the preliminary objection raised by the Respondent, the tribunal held in paragraph 9 in interpreting Section 251(1)(a)(b) on the exclusive jurisdiction of the Federal High Court, that it only excluded COURTS and so it does not affect the powers of a tribunal. The tribunal further stated in paragraph 14 that the exclusion is limited to only superior courts of jurisdiction as listed in the Constitution.
However, this dissertation disagrees with this position because where a tribunal exercises judicial powers of the Federal High Court on the same subject matter then it is venturing into the exclusive ambit of the Federal High Court. This in StabiliniVisononi v.FBIR42the court declared the powers of the VAT –T as ultra vires as usurping the powers of the Federal High Court. This study will therefore recommend an amendment to Section 251 of the Constitution43by expunging the qualifier “exclusive” from jurisdiction to enable the TAT operate constitutionally.
This dissertation would also suggest an amendment to paragraph 2(1) of the Fifth schedule to theEstablishmentAct44 which gives unilateral powers to the Minister of Finance to appoint and remove any member of the TAT. It therefore suggests that advertisement be made to the public and shortlisted candidates appear before the National Assembly for confirmation. In addition to its findings, is the removal of the Ouster Clause in paragraph 8 of the Fifth schedule to the Actwhich prevents any legal action challenging the validity or otherwise of the appointment of any member of the tribunal. This Research criticized this provision as not only
41 (2009) 13 NWLR (Pt.117) p.9 See also (2012)7Tax Law Reports of Nigeria,108. 42 Supra at page 11. 43 Constitution of the Federal Republic of Nigeria,1999(As amended) 442007
draconian but also offends Section 6(6) of the Constitution45 as it impedes on the rights of parties to fairness and justice.The study therefore suggests an amendment by the National Assembly in deleting paragraph 8 of the Fifth schedule46.
This study also suggested an amendment to Paragraph 17 of the Fifth47 Schedule with regards to Appeal on points of Law and Fact. This provision in the Act implies that where a tax payer is dissatisfied with the ruling of the TAT, a person may appeal to the Federal High Court which has to be on point of law. This is so because the TAT adjudicating on tax disputes, ascertains the facts and draws its conclusion from the tax laws.However,this dissertation asserts that there is a thin line of distinction between facts and law,and therefore for the Federal High Court to be restricted on points of law in entertaining appeal from the tribunal would be a misnomer that would do little or no justice to the tax payer or authority. Another reason dicta forstudy advocating foran amendment to this provision is the fact that the Federal High Court being a superior court of records and also having the power to exercise original jurisdiction over tax disputes cannot have its powers limited to hearing appeals from the TAT on point of law.
Considerably, this work would be guided by the statutory provisions of the Act48, beginning with the establishment provision of Section 59 which created the TAT. References were made to the First and Fifth schedule, the former enumerating the extant tax laws and regulations the FIRS is empowered to administer while the latter is the establishment and jurisdiction of the TAT which is created to exercise jurisdiction to resolve disputes in civil matters. 1.8Organizational Layout. The dissertation is divided into five chapters, these are as follows:
45 Op. cit. 46 FIRS (Establishment) Act, 2007. 47 Ibid. 48 Op. cit.at page 14
Chapter One:This chapter began with an introduction to the dissertation. It provided for an Introduction which gives an insight into the topic of the Research work and a summary of each chapter. This chapter looked at the Background to the dissertation which gave rise to establishment of the TAT due to the failure of the regular courts to address tax related matters with dispatch which had hitherto given rise to back log of cases resulting to loss in revenue.This chapter also discussed the Statement of the Problem inherent in the judicial system that led to the establishment of the defunct Body of Appeal Commissioners and the Value Added Tax Tribunal.Also discussed was the establishment of the Tax Appeal Tribunal via theEstablishment Act,49and its attendant constitutional challenges where highlighted. In this chapter, the Objective of the Dissertationwould be discussed. The objective would examine the fact that there is a conflict of jurisdiction over tax matters and revenue of the federal government between the TAT and the Federal High Court, that there is conflict in the composition of members of the TAT, that the ouster clause contained in the Act creating the tribunal which tends to prevent any person from challenging its composition and the restriction of the right to appeal to the Federal High Court would be x-rayed. The chapter would be taken a look into the Justification of the Dissertation which entails the fact that the TAT has successfully resolved lots of tax disputes speedily, hence increasing revenue for government and a tool for tax enforcement. Research Methodology would also form part of this chapter elucidating on the doctrinal method of research. Literature Review in this chapter will outline the various writers on the subject matter of discussand Organizational layout would be presented in this chapter.
Chapter Two: This chapter will examine the establishment, powers, functions, composition and operations of the TAT. Also, an examinationinto the establishment of the tribunal‟s legal frame
work which is the Establishment Act50 would be undertaken. In addition, the jurisdiction of the TAT covering disputes arising from all taxes which is also guided by the TAT(Procedure)Rules,51 will be discussed. Chapter Three:This chapter will examinethe limitations to the jurisdiction, powers and functions of the defunct BAC and VAT-T which gave rise to the formation of the TAT. A critical analysiswill be done by comparing the TAT and its structure as well as its jurisdiction, powers, functions with decided cases and the BAC and VAT-T on the other hand.
Chapter Four: This chapterwill be dealing with the constitutional limitations to the powers and functions of the TAT as a dispute settlement mechanism in Nigeria. The case of Stabilini Visononi v.FBIR52will be brought to bear as this decision affected the legality and constitutionality of the VAT-T. More also, this chapter will be looking at: Tax Appeal Tribunal, A Tool for Tax Compliance and Enforcement cases. Chapter Five: This chapter, is the conclusion providing the summary of findings, recommendation/suggestions and concluding remarks
50 Supra at page 14. 51 2010 52 Supra.at page 13
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