Ex-LCCI D-G calls for a review of Tax Appeal Tribunal Rules

Dr Muda Yusuf, former Director-General of the Lagos Chambers of Commerce and Industries (LCCI) has called for a review of the Tax Appeal Tribunal (Procedure) Rules recently issued by Mrs. Shamsuna Zainab Usman, Minister of Finance, branding them unfair.

Yusuf made the call on Friday while speaking as a guest on Channels Television’s Business Morning. According to the former LCCI helmsman, the new rules contain many elements with the potential to accelerate tax dispute resolution, but are capable of making the country’s investment environment unappealing to foreign investors and local businesses.

‘’There are some components of the rules that one should commend. First, there is a provision about electronic filing. In these days of technology, that is a welcome development. One doesn’t have to go and file physically.

‘’There is also the provision about virtual appearance. In other words, if you want to appear before the tribunal, the new rules say you can appear virtually.

‘’Again, that is about applying technology to the proceedings of the tribunal. There is also the component that has to do with the place of hearing,’’ he stated.

He, however, branded as unfair the provision of Order 3 Rule 6 of the new rules, which makes it mandatory for a tax disputant to pay 50 per cent of the contended tax liability before filing an appeal, arguing that it impedes the right to fair hearing and could spell danger for investors.

“The one that is a bit contentious and a bit disturbing is the one that says that if you are making a complaint around the issue of tax assessment, you have to deposit 50% of the amount in dispute.

“I think that is something that needs to be reviewed because the whole principle of tribunal and of arbitration of the management system is to ensure the principle of fair hearing.

“Let’s assume you have a very outrageous assessment to the extent that even the 50% may become difficult for you to pay. Does that mean you won’t be entitled to an appeal?

“The point is that the provision should be looked at in the interest of fair hearing. We are talking about creating a tax environment that promotes investment.

“There is this urge about raising revenue and this can be pushed to a point where it is at the detriment of investment. This means the whole country will lose because if the revenue is generated, what is happening to investments? What is happening to job creation? What is happening to prices and also the welfare of the people? We need to create a tax environment that is investment friendly,” he said.

Yusuf also argued that Order 3 Rule 6 is inconsistent with the Federal Inland Revenue Service (FIRS) Establishment Act, which he said already provides that the tax tribunal will use its discretion on what amount of deposit is to be paid. He stated that the FIRS Act prescribes that the tribunal can only demand a deposit if the taxpayer has not been filing returns.

“That is what is in the act, but this one is totally different. The act is a bit fair because if you are even to pay a particular amount, you pay the amount paid the previous year, then the appeal can be heard.  But in a situation where you pay 50% of the amount in dispute, I don’t think it’s fair. So, it’s an issue of fairness and one of getting the investors to have some more confidence.

“If you have a tax environment that could scare investors, then there is a problem,” he stated.


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