18 Jan



The Constitution: The constitution is the supreme law of the land and by Section 1(1 and 3) of the 1999 Constitution, inconsistencies are null to their extent of inconsistency. The Taxes and Levies (Approved List for Collection) Act which stipulates that its provisions are superior to the provisions of the constitution can be challenged on the ground of unconstitutionality.

The Statutes and other State Laws: While the constitution empowers the government to impose tax, actual imposition is done expressly by the statutes. Various legislations govern the various taxes in Nigeria. Each applying to its own like PITA, CITA, VATA, CGT, and so on. Taxation can only be imposed by statute. Section 2(2) of the PITAct which provides that tax shall be imposed by the FBIR can be challenged because the FBIR is a mere administrative agency and tax can only be imposed by statute.

Case Laws: Where the tax authority disregards the objection of a taxpayer, he may appeal to the Body of Appeal Commission which is a quasi-judicial body that conducts adjudication in private. Appeals then go to the State High Court or to the Federal High Court in the case of Federal taxes. Further appeals can go to the Court of Appeal and Supreme Court. In all these interpretations by the court, new principles and rules are formulated. See for example SPDC V FBIR.

Delegated/Subsidiary Legislation: can be seen as rules made by bodies other than the official law-making body. Usually by administrative bodies. Legislative enactments merely provide the general framework of principles leaving specialists to deal with details in form of rules and regulations. Delegated legislation is inevitable due to the dynamics of modern day governance and the inability of the legislature to make laws for every aspect of human life due to lack of time or technical expertise on the matter. However the exercise of this subsidiary legislative power must be within the provisions of the enabling statute to prevent a ruling of void or ultra vires. An example of a subsidiary legislation is the Withholding Tax Regulation made in pursuance of 69-73 of the PITA.

Concession, Advance Ruling Circulars can be regarded as mere guidelines. E.g. in Halliburton West Africa V FIRS, the tax authority declared that it shall not strictly enforce certain rules (relating to deductions and fees). The appellant relied on this declaration and deducted certain fees and management charges when transferring money to its subsidiary. The tax authority later turned around and disallowed the deduction. The taxpayers averred that they had relied on the circular distributed by the tax authority. The court held that circulars issued by tax authorities are mere opinions and have NO BINDING EFFECT.

:: Such circulars and concessions should be published to increase public awareness and ensure transparency.

International Law: Due to intercontinental interaction, the world is becoming a global village. This calls for cooperation between states. Certain taxation treaties can be enacted between the member states. For example, the Common External Tariffs CET. Note however, that Section 12(1) of the 1999 Constitution requires all treaties to be domesticated in Nigeria before they can have the force of law. Once domesticated, they form a source of taxation law.

Budget Speech: This is a secondary source of law. The president makes (and presents to the legislature for approval) a budget speech every fiscal year setting out the fiscal, economic and political policies for the year. It is a mere indication what the law might be in the nearest future. There is no obligation to comply with (or be guided by) a budget speech until it has been given legislative backing.

Law Textbooks and Treatises: are secondary sources with persuasive authority. Utilised when the authority on a tax issue is scanty or inexistent. Some eminent tax authors include; Prof O. Akanle, Prof MT Abdulrazaq, and so on.




Quite eccentric really

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