Pending the resolution of the jurisdictional concerns around TAT, it is imperative for FIRS to consider alternative options to resolve these age-long disputes and collect the tax payments due to the Federation without much ado or delay.

One of the hallmarks of a good tax system is certainty. Consequently, a good tax system should unequivocally set out the tax obligations of all stakeholders and consequences of non-compliance as well as a clear framework for tax administration. An effective mechanism for tax dispute resolution is also one of the features of a good tax system.

The intent of the National Tax Policy is clear. "...the tax appeal process an integral and important part of the tax administration shall therefore be the responsibility of tax authorities to ensure that the tax appeal process is easily accessible to taxpayers and all its processes and procedures simplified..."

The tax dispute resolution process envisages an objection in writing to the assessment notice by the tax authorities and where the tax authority is unable to agree or accept the revised tax position by the taxpayer, either the taxpayer or the tax authority should proceed to the Tax Appeal Tribunal (TAT). It is at this level that the tax dispute resolution mechanism has become a challenge.

TAT was established further to Section 59 (1) of the Federal Inland Revenue Service (Establishment) Act 2007. The TAT 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.

It is trite that the "jurisdiction" of a court or tribunal is derived from its enabling statute. It is the statutes which create the court or tribunal that define its jurisdiction. Jurisdiction is the authority which a court or tribunal has to decide matters which are litigated before it or to take cognizance of matters presented in a formal way before it. The jurisdiction of a court to adjudicate in a dispute, civil or criminal, is a threshold issue. Consequently, without the necessary jurisdiction, a court or tribunal cannot make any valid order.

The concerns around the jurisdiction of the TAT vis-à-vis the FHC has been resolved differently in two conflicting decisions of the FHC. Whilst one decision affirms the relevance and constitutional consistency of the TAT the other declares the TAT as unconstitutional. This is on the ground that Section 251(1a) of the Constitution of the Federal Republic of Nigeria (CFRN) provides that the Federal High Court shall have exclusive jurisdiction to entertain matters between companies which relate to the revenue of the Federation. This decision is not persuaded by the history of the TAT, its transformation from the Body of Appeal Commissioners (BAC) and the fact that it is a pre-requisite to instituting an action before the FHC given that appeal from TAT goes to the FHC.

In the light of these conflicting decisions, it becomes inevitable to raise the query: what is the fate of the TAT? The decisions of courts of co-ordinate jurisdiction are not binding on each other. Thus, until and unless the appellate court affirms one or the other of the decisions, the uncertainty in the forum to adjudicate a tax dispute by the taxpayer continues. This is not good for the Nigerian tax system.

Generally, a tax payer that is dissatisfied with a decision particularly an assessment issued by tax authorities is entitled to object to such decisions within a specified timeframe. Where the application is going before the TAT the relevant period is 30 days. The question then arises that if the TAT is considered unconstitutional and the tax payer intends to commence the proceedings at FHC, will the 30 day threshold still be applicable?

One of the TAT panels ruled that a Notice of Refusal to Amend (NORA) by the tax authorities is not a necessary pre-condition for the taxpayer to commence an action at the TAT. Given the possibility that the TAT may be unconstitutional, what is the relevance of this ruling that was at the time well applauded by taxpayers?

Presently, taxpayers are feeling short-changed by the flip-flop, topsy-turvy, up today and down tomorrow approach to the tax dispute resolution process. There were matters pending with BAC which originated since 1999 and could only be progressed when the TAT panels were constituted in 2010.

Some of these cases have not been fully determined when the TAT was thrown into the current legal, constitutional and judicial morass. What cannot be denied is that these unresolved cases hold significant tax revenue that FIRS, being the primary appellant/respondent in these matters, has been leaving on the table for more than 15 years!

Pending the resolution of the jurisdictional concerns around TAT, it is imperative for FIRS to consider alternative options to resolve these age-long disputes and collect the tax payments due to the Federation without much ado or delay. There is need to consider the increasingly significant loss in time value of money and the possibility of bankruptcy or exit of these debtors from the Nigerian market, whereupon Nigeria may find herself holding the crappy end of the stick.

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