On Monday, 16 January 2023, the Lagos Division of the Federal High Court (“FHC” or “the Court”) held, in Wheatbaker Investment and Properties Limited (“WIPL” or “the Company” or “the Plaintiff”) and Economic and Financial Crimes Commission (“EFCC” or “the Commission”) & Federal Inland Revenue Service (“FIRS” or “the Service”) (herein referred to as “the Defendants”), that the EFCC does not have the legal and statutory right to assess or enforce the collection of taxes on behalf of the Federal Government of Nigeria (“FGN”).
The FHC also affirmed that the FIRS is the only body empowered and vested with the statutory duty to assess, collect and enforce company tax in Nigeria.
Facts of the case
WIPL was incorporated as a private limited liability company under the Companies and Allied Matters Act, Cap .C. 20, Laws of the Federation of Nigeria, 2004 to provide hospitality services to the public while EFCC is an agency of the FG empowered to conduct investigations and prosecute all economic and financial crimes of individuals, corporate bodies org roups in Nigeria.
On 1 December 2020, the Commission invited the Company for an investigation meeting based on intelligence it received alleging economic sabotage and tax evasion by the Company on taxes remitted to the FIRS. During the meeting, the Commission interrogated the Company’s representatives and staff members in search for evidence of the alleged tax evasion. Following the meeting, the EFCC unilaterally computed and assessed the Company to an additional tax liability of ₦481,568,726.66 for the relevanty ears.
The Company responded that the computation of additional assessment for the years already audited by the FIRS was outside the Commission’s statutory jurisdiction. However, the EFCC disregarded the Company’s objection and argued that it received intelligence alleging that the Company was involved in economic sabotage and tax evasion which it found worthy to investigate. The Commission further maintained that it had the statutory powers to conduct investigations and prosecute all economic and financial crimes in Nigeria to determine the extent of financial loss and such other losses by the government, private individuals, or organizations.
Following the impasse, the Company commenced a suit against the Defendants at the FHC wherein it raised the following issues before the Court for determination:
- Whether having regard to the provisions of Section 8 of the Federal Inland Revenue Service (Establishment) Act, 2007 ("FIRSEA") and Section 2(1) of the Taxes and Levies (Approved List for Collection) Act, 1998 ("TLA"), it is the legal and statutory responsibility of the EFCC to undertake the assessment, enforcement, and collection of taxes on behalf of the Federal Republic of Nigeria.
- Whether having regard to Section 8 of the FIRSEA and Section 2(1) of the TLA, it would not amount to an illegality and double jeopardy to allow the Defendants subject the Plaintiff to the same process of assessment, collection, and enforcement of tax.
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