$5 billion trapped at Tax Appeal Tribunal, lawyer says

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A Lagos-based lawyer, Donald Egho, has raised alarm over the huge amount of funds currently trapped at the Tax Appeal Tribunal (TAT).

Mr. Egho who spoke with journalists in Lagos, Sunday, said the amount of taxes due to the federation, which he estimated at over $5 billion, is currently lying fallow in the various divisions of the tribunal.

According to him, the funds are disputed taxes, currently subject to litigation and pending before TAT.

“The continued failure of the Federal Government to urgently reconstitute the various panels of TAT means those taxes due to the Federal Government will remain suspended for as long as there are no panels to adjudicate on the disputes; thereby robbing both the states and the Federal Government of urgently needed revenue,” said Mr. Egho, an expert on Taxation.

“As long as taxes are disputed, they remain in a state of abeyance, pending the determination, one way or the other by the tribunal,” he said.

The Tax Appeal Tribunal, established further to Section 59 (1) of the Federal Inland Revenue Service (Establishment) Act 2007, is empowered to settle disputes arising from the operations of the Act and others as spelt out in the fifth schedule to the FIRS Establishment Act.

Specifically, and in accordance with Section 59 (2) of the FIRS Act, the TAT has jurisdiction to entertain disputes arising from the Companies Income Tax Act; Petroleum Profit Tax Act, Personal Income Tax Act, Capital Gains Tax Act, Value Added Tax Act; Stamp Duties Act; Taxes and Levies (Approved list for collection) Act; as well as other laws, regulations, proclamations, government notices or rules related to these Acts. Appeals lie from the decisions of the TAT to the Federal High Court (FHC).

The TAT is meant to ensure fairness and transparency of the tax system, minimise the delays and bottlenecks in adjudication of tax matters in the traditional court system and generally improve taxpayer’s confidence in the tax system in Nigeria.

Mr. Egho cited the case of the Federal Board of Internal Revenue versus Cadbury, a matter which arose from the operations of the Value Added Tax law, which was still pending before the Supreme Court 15 years after the tax dispute arose, with the taxes remaining unpaid.

He noted that the habit of using litigation to frustrate the collection of taxes was further emboldened with the apparent negligence of the government to urgently reconstitute the panels of TAT.

“Unless the government takes the business of taxation and its operations seriously, all the talk of diversifying the national economy from its sole dependence on revenue from the sale of crude oil, will remain a dream,” Mr. Egho said.

He criticized some state boards of internal revenue for imposing arbitrary and illegal taxes and levies on the public, knowing that tax payers currently had no avenue to take their frustrations to.

According to Mr. Egho, this could lead to a breakdown of law and order if these antics are not checked by the government.

It will be recalled that the various panels of TAT wound up their operations in the month of May 2016, having completed their constitutionally mandated tenure of six years.

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