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MultiChoice Nigeria, Tax Tribunal Ruling Brouhaha, Issues And Doubts

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The Multichoice (Nigeria) Ltd case before the Tax Appeal Tribunal (TAT) confirms that we are in interesting tax times. The TAT in the Lagos Zone held at Lagos recent ruling raises fundamental doubts and issues of taxation in Suit No: TAT/LZ/CIT/062/2021 dated the 24th day of August 2021.

In the quest to resolve the issues and doubts, three fundamental and basic tax issues as stated by the following judicial decisions need to be restated and noted. What are they? First, in Karam v. Commissioner of Income Tax (1946-1949) 12 WACA 331, 333, 336, it was held: “Statutes which impose pecuniary burdens on subjects are interpreted strictly.

“See also Alhaji Ibrahim Ahmadu & Anors VS Governor of Kogi State (2002) 2 NWLR (PT 755) pg 502 at 522 and Federal Board of Inland Revenue VS Nigeria General Insurance Company Ltd (1966) LLR 88 at 95”.

In 7UP Bottling Company PLC VS Lagos State Internal Revenue Board (2000) 3 NWLR (Pt 650) 565 at 591 paras H-A, Nzeako JCA held: “It has often been the view of courts here and elsewhere that if a person sought to be taxed, comes within the letter of the law, then such a person must be taxed, on the other hand, if the tax authority is seeking to recover tax from a person is unable to bring him within the letter of the law, the person will be free. However apparently, within the spirit of the law, his case ought to otherwise appear to be.”

Secondly, in the case of Okupe VS Federal Board of Inland Revenue (1992) 1 NTC 321 at 330, it was held that while the Federal Board of Inland Revenue is entrusted with the duty to operate the tax law of the country, in doing so, the legislature provides safeguards for the liberty of the taxpayer and in particular safeguards from arbitrary and capricious assessments which are not made bona fide or which are perverse.

Thirdly, in Azikwe VS FEDECO (1981) 1 PLR at 561, the court held that the tax affair of everyone is a very secret and confidential matter between the tax authorities and the tax payer. No one is entitled to be informed what his neighbour pays by way of tax. This judgment is supported by the provisions of Section 50 of the Federal Inland Revenue Service Establishment) Act of 2007 on official secrecy and confidentiality in tax matters.

What do all these mean? They simply mean in the words of the Court in the English case of Cape Brandy Syndicate VS Inland Revenue Commissioners (1921) 12 Tax Cases 358 that, “In a taxing act one has to look merely at what is clearly said. There is no room for any intendment. There is no equity about a tax. There is no presumption as to a tax. Nothing is to be read in, nothing is to be implied. One can only look fairly at the language used.”

Lady Decency
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