The Federal High Court (FHC) of Nigeria recently made a significant ruling in the case of Joseph Bodunrin Daudu SAN v. Minister of Finance Budget and National Planning & 2 Ors. The FHC struck down provisions that required taxpayers to pay security deposits before filing appeals at the Tax Appeal Tribunal (TAT) and the courts. These provisions, found in various rules and Practice Directions, were deemed to infringe upon taxpayers' constitutional right to fair hearing and were consequently declared null and void.
The FHC's decision highlighted the importance of the right to appeal as a constitutional right and criticised the deposit requirements for imposing an undue burden on taxpayers. The offending provisions were struck down, allowing taxpayers to file appeals without payment of any deposit.
While the ruling is lauded for upholding taxpayers' rights, questions remain regarding the interpretation of relevant laws and the standardisation of deposit requirements which still exist in the FIRS Establishment Act. The constitutionality of rules of court and practice directions also remains contentious, indicating potential further legal challenges.
Overall, the ruling provides clarity on taxpayers' rights in Nigeria's tax dispute resolution process and underscores the need for transparent and fair procedures in tax administration.
Please see our tax Alert and the FHC ruling below:
Download Tax Alert_FHC nullifies the requirement to pay security deposits