The Court of Appeal, Abuja Division, has ruled that the Federal Inland Revenue Service (FIRS) Act supports the Economic and Financial Crimes Commission’s (EFCC) collaboration with other government agencies regarding tax evasion investigation in Nigeria.
Justice Balkisu Bello Aliyu of the Court of Appeal, Abuja Division, passed the verdict, according to a statement by the EFCC on Thursday.
The statement says the Appeal Court “affirmed the power of the Economy and Financial Crimes Commission, EFCC, to investigate and prosecute cases of tax evasion and other tax-related issues,” while setting aside the judgment of Justice Taiwo. O. Taiwo of the Federal High Court sitting in Abuja.
Legal Dispute
According to the EFCC, the judgment of the trial court originated from the suit of Insurance Resourcery and Consultancy Service Limited that had sued the EFCC for inviting and investigating its officials over alleged tax evasion.
The suit was said to have claimed that the Commission lacked the competence and legal right to investigate its officials over tax evasion.
The company was said to have relied on several Sections of the Federal Inland Revenue Service, FIRS, Act to make its claims.
The trial court, per Justice Taiwo, affirmed the claims of the company.
The trial judge ruled that the Commission cannot extend its investigation of money laundering to tax evasion, “being the predicate offence( a component of a larger crime).”
Dissatisfied with the judgment of the trial court, the EFCC approached the Appellate court, citing “Section 46 of its Act” and asking for the setting aside of the judgment of the trial court on five grounds of appeal.
One of the grounds, according to the statement, “is whether the trial court was right when it held that the Commission lacked statutory power to invite or investigate Resourcery and Consultancy Service Limited for money laundering, which has tax evasion as a predicate offence.”
Appeal Court Ruling
In her ruling, Justice Aliyu held that the learned lower court erred in holding that the EFCC “has no power to investigate tax evasion in view of Section 46 of the EFCC Act.”
“Further, since the FIRS Act itself specifically provides and supports collaboration between the FIRS and the EFCC and other Government Agencies in the investigation and enforcement of tax evasion, it followed that the above finding of the trial court that the Appellant cannot extend its investigation of money laundering to tax evasion as a predicate offence is not supported by law and therefore wrong and I so hold,” the judge was quoted as saying.
- The judge disagreed with the judgment of the trial judge that the EFCC “ has no statutory power to cause investigation on tax evasion.”
The judge stressed that “ having resolved the two issues for determination in favour of the Appellant means that the appeal is meritorious and it is allowed by me.”
- Consequently, the Appeal Court set aside the judgment of the Federal High Court, sitting in Abuja, delivered on 28th July 2022.
- She gave the ruling in Abuja in a unanimous judgment of three Justices, namely, Balkisu Bello Aliyu, Adebukunola Banjoko, and Okon Efreki Abang.
