In a latest epochal determination, OANDO SUPPLY & TRADING LTD V FBIR (2001) four TLRN 113, the Lagos Zone of the Tax Attraction Tribunal (TAT) headed by Mr. Kayode Sofola, SAN held that taxpayers needn’t wait indefinitely on the FIRS to subject NORA earlier than filling tax appeals to the TAT. “Unreasonably delay” by the FIRS is deemed to be refusal to revise the evaluation as desired by the tax-payer, pursuant to his objection. This piece examines the ramifications of this determination for the tax objection/attraction course of in Nigeria, while prefacing the dialogue with an outline of the tax dispute decision course of, pre and put up FIRS (Institution) Act No. 13, 2007 (FIRS Act).
The Tax Objection/Attraction Course of
Previous to the enactment of the FIRS Act, the tax objection and attraction course of was respectively enshrined in sections 69-76 CITA (for CIT, CGT and ET), sections 38-43 PPTA (for PPT and ET), part 20 and 2nd Schedule VATA (for VAT). For upstream tax disputes, the method per PPTA provisions, entailed: (a) subject of evaluation by FIRS to tax payer; (b) written objection inside 21 days to FIRS; (c) consideration of objection by FIRS and subject of revised evaluation or NORA; (d) attraction to Tax Attraction Commissioners inside 30 days; (e) additional attraction to the Federal Excessive Court docket (FHC) and thereafter, to the Court docket of Attraction and the Supreme Court docket. CITA’s part 69(2) and PITA’s 58(1) gives for thirty-day objection interval, and had related provisions as PPTA on NORA, and attraction thereafter to Federal or State Excessive Court docket because the case could also be. By itself half, the VATA initially supplied for direct attraction (no objection) to the VAT Tribunal if an individual is aggrieved by an evaluation, inside 15 days of receipt of such evaluation however part 10 VAT Modification Act (VATTA) 2007 rectified the omission.
Usually, an uncontested evaluation 0r unchallenged NORA (i.e. evaluation not objected to/NORA not appealed in opposition to inside time), renders the evaluation ultimate and conclusive in opposition to the taxpayer – the Income can implement assortment of the tax represented therein. CITA and PPTA had provisions for extension of time inside which to object/attraction. I submit that though PITA had no such provision, upon passable causes being proven for delay, a taxpayer ought to get pleasure from such reduction, in order not be shut out from contesting an objectionable evaluation. The inherent jurisdiction of the Court docket and provisions of the related Excessive Court docket Guidelines on extension, may very well be known as in support. Conversely, a legitimate objection places the evaluation in abeyance pending evaluation/determination of the Income to revise/subject NORA on similar; or pending appellate determination on the NORA.
The FIRS Act which turned efficient in April 2007, sought to impose uniformity within the tax dispute decision course of by repealing inconsistent provisions of tax legal guidelines or have them learn topic to such modifications as would convey them into conformity with the FIRS Act (part 68). Nevertheless, because of some gaps within the Act, ought to the attraction process within the FIRS Act not be learn along with the tax objection provisions of the CITA, PPTA and PITA? While part 18 CITA Modification Act 2007 (CITAA) repeals the CITA attraction course of, it doesn’t repeal part 69(2) CITA on tax objection, as a result of the stipulation is “appeals shall be as supplied within the [FIRS] Act”. This author wonders whether or not part 18 CITAA isn’t even otiose, given the provisions of sections 59 and 68 FIRS Act – the inconsistent provisions for tax appeals within the FIRS Act routinely overrides equal provisions in CITA.
Paragraph 13(1), fifth Schedule FIRS Act gives that: “an individual aggrieved by an evaluation or demand discover made upon him by the Service or aggrieved by any motion or determination of the Service below the provisions of the tax legal guidelines…might attraction in opposition to such determination or evaluation or demand discover throughout the interval stipulated below this Schedule to the [Tax Appeal] Tribunal”. Part 59 FIRS Act gives the idea for the above prescription, with part 59 (2) vesting the TAT jurisdiction to “settle disputes arising from the operations of this Act and below the First Schedule.”
It could appear due to this fact that the absence of part 18 CITAA sort provision for PPT/PIT taxpayers doesn’t weaken the view that it’s doable to attraction on to the TAT. Oando (under) has certainly affirmed the correct of direct entry. Nevertheless, for coverage causes, the objection process shouldn’t be thrown overboard; it may probably result in decision of points between FIRS and the taxpayer, thereby obviating the necessity for tax attraction and attendant prices.
Moreover, while the FIRS Act replaces the executive positions of the tax legal guidelines, the place it fails to offer for detailed process that’s already supplied for by PPTA, such extant provision must be utilised if not inconsistent with the FIRS Act. Owing to years of ingrained observe, danger administration or another “strategic” purpose, some taxpayers might want to make the most of the objection course of, as a primary step in direction of decision of their tax disputes. The FIRS is unlikely to problem such method, having arrange “arbitration desks” at Built-in Tax Workplaces to deal with tax disputes, after which at Regional Workplaces earlier than resort to the TAT (Nnamdi Duru, This Day, 14th July 2009). Within the occasion that it turns into vital, a taxpayer can ask for extension of time to attraction as occurred in Oando. In abstract, one may both attraction in opposition to an evaluation immediately, or object earlier than interesting.
OANDO v FIRS: The Details & Choices
The Appellant had acquired further assessments for 2006 – 2008 years of evaluation, and objected thereto in Might 2010. Six months thereafter, the FIRS claimed it was nonetheless reviewing the Objection, pursuant to which Oando determined to attraction in opposition to the assessments to Lagos TAT and sought extension of time inside which to attraction. The Respondent challenged the appliance as frivolous, the attraction incompetent, and that the TAT lacked jurisdiction as a result of it (FIRS) had not issued NORA in respect of the assessments.
In dismissing the Respondent’s submissions, the TAT held inter alia that: (a) NORA (or certainly objection) is not a prerequisite for tax attraction below the FIRS Act, given Para 13(1) fifth Schedule (reproduced as Order 3, Rule 1 TAT (Civil Process) Guidelines); (b) though the regulation solely stipulated 30 days inside which taxpayer should object to assessments, “a 90 day timetable” is affordable and beneficiant” inside which the Income ought to reply to the objection. At p. 123, the TAT acknowledged: “the taxpayer anxious to know its appropriate and exact tax legal responsibility is entitled to get that info shortly…the tax collector shouldn’t be allowed to hold the dread of an impending NORA over the taxpayer’s enterprise –that will flip the taxman right into a hangman.” That is moreso as “the taxpayer can’t pressure NORA out of the dilatory tax collector. We should maintain the Respondent, to an affordable stage of duty within the efficiency of its duties particularly its responsibility of well timed enterprise correspondence with taxpayers”; (c) on the problem that appeals can solely be in opposition to a ‘determination’ or ‘order’, the TAT affirmed that “an evaluation entails each a call and an order”; (d) a taxpayer difficult an evaluation is an individual aggrieved inside Para 13(1), fifth Schedule; (e) the TAT can deem a call to have been made by the FIRS: the place “the FIRS omits for too lengthy to reply a method or one other, their omission should be interpreted, or deemed as a refusal determination – a [NORA].”
Conclusion
Oando is a welcome addition to our tax jurisprudence; significantly the popularity of the uneven taking part in area that the regulation has created by omitting to specify timelines for FIRS’ response actions through the objection course of, and the pragmatic method the TAT took to deal with the issue. I agree wholeheartedly that ‘affordable’ time should be imposed within the circumstances. In Vestey v IRC (1980) STC 10, at 19, Lord Wilberforce was of the view that the UK Income should act with “administrative widespread sense” as a result of “nobody goes to complain if they bring about humanity to bear in laborious instances.”
How rather more in coping with objections as in Oando! Part 20(3) VATA as amended by part 10 VATAA can also be instructive in respect of VAT objections to the FIRS: “an attraction [sic objection] earlier than the FIRS shall be decided inside 30 days.” One other parallel could also be drawn with part 5 FOI Act 2011 which mandates public establishments to resolve on purposes for entry to info inside 7 days. Nevertheless, the omission of timeline on FIRS’ proper of attraction to the TAT below Para 14, fifth Schedule, if the FIRS is aggrieved with any individual’s non-compliance with the tax legal guidelines, is seemingly much less objectionable, since FIRS is to implement the availability as its capability and targets permits.
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