The Federal High Court in Abuja has nullified the Economic and Financial Crimes Commission’s demand for €3.2 million and $2.4 million in alleged tax liabilities against Amadeus Marketing Nigeria Limited.
The ruling, delivered by Justice Obiora Egwatu and contained in a Certified True Copy of the judgment seen by Nairametrics on Monday, held that only the Federal Inland Revenue Service (now the Nigeria Revenue Service) has the statutory authority to assess and enforce Value Added Tax obligations.
The decision settles a legal dispute between Amadeus’ legal team, comprising Ogunmuyiwa Balogun and Babatunde Ige and the anti-graft agency over whether the EFCC can lawfully issue tax assessment and demand notices, and clarifies the limits of the Commission’s powers in tax-related investigations.
What they are saying
According to the judgment, the dispute before the court was not about the EFCC’s general powers to investigate financial crimes, but whether those powers extend to assessing and demanding VAT payments.
“Surprisingly, by a letter dated October 8, 2024 (Exhibit A4), the EFCC served the Plaintiff with a VAT liability assessment purportedly carried out by the EFCC, where it assessed the Plaintiff’s VAT liability at €3,213,707.20 and $2,476,462.49 and labelled the same as expected value added tax liability,” Amadeus’ lawyer told the court.
“The intelligence revealed that the Plaintiff and some airline operators are generating revenue in Nigeria but are not registered for tax purposes in Nigeria, despite operating in the country for over 15 years,” the EFCC’s counsel, Mrs.A. Amedu argued in defence of the Commission’s actions.
What the court decided
In resolving the case, Justice Egwatu examined the statutory provisions relied upon by the EFCC to justify its demand.
He held that Sections 38(1) and (2) and Section 24 of the Money Laundering (Prevention and Prohibition) Act, 2022, cited by the EFCC, do not confer powers to assess or demand tax payments.
- The judge noted that the EFCC’s mandate to investigate and prosecute economic and financial crimes under Section 6 of the EFCC Act was not in dispute.
- He stressed that if tax evasion or money laundering is established during an investigation, the EFCC’s duty is to file charges, not to issue tax assessments or demand notices.
- The court affirmed that the FIRS Act and other tax statutes vest exclusive powers of tax assessment and collection in the FIRS, now the Nigeria Revenue Service.
- JusticeEgwatualso rejected the EFCC’s argument that the lawsuit was intended to obstruct its statutory responsibilities, noting that Amadeus cooperated with the investigation and only challenged the legality of the tax demand.
- JusticeEgwatuagreed “with the Plaintiff that the Defendant’s acts of assessing and issuing a demand notice for the payment of the VAT liability, vide Exhibit A4, are ultra vires (beyond its powers) and therefore amount to a nullity.”
- The court declared that the EFCC has no statutory powers to assess VAT or any other tax liabilities or issue demand notices for such payments.
- It issued a perpetual injunction restraining the EFCC from further assessing or demanding tax payments from Amadeus on the facts of the case.
- The court ultimately set aside the assessment and perpetually restrained the EFCC from further assessing or demanding tax payments from the company.
Backstory
The legal dispute arose from overlapping actions by tax and law enforcement authorities over Amadeus’ operations in Nigeria.
According to court filings, the Federal Inland Revenue Service had already carried out tax audit exercises on the company covering the 2015–2017 and 2018–2023 financial years and issued additional assessments, which Amadeus complied with.
On April 23, 2024, the EFCC invited Amadeus to a meeting as part of an investigation into the company’s tax remittances from 2010 to date, including years previously audited by the FIRS.
Amadeus’ Country Manager, Mr. Yann Gilbert, honoured the invitation, submitted documents, wrote a statement, and was later released on bail.
The EFCC subsequently issued a demand notice on October 8, 2024, directing the company to remit the assessed sums to the EFCC or designated Federal Government accounts by October 29, 2024.
Amadeus challenged the action in court, arguing that the EFCC lacked statutory authority to assess VAT or issue a tax demand.
What you should know
The ruling reinforces the legal separation between tax administration and criminal investigation in Nigeria.
- It affirms that while the EFCC may investigate allegations of tax evasion and money laundering, the authority to assess and demand payment of taxes rests solely with the FIRS.
- The decision aligns with earlier appellate rulings recognising the FIRS Act as the governing framework for tax assessments, while allowing collaboration between agencies strictly for investigative purposes.
- For taxpayers and regulators alike, the judgment provides clearer guidance on institutional boundaries in tax enforcement and financial crime investigations.
