By Olanrewaju M Lassise-Phillips
The Tax Appeal Tribunal (TAT), designed to be Nigeria’s fast-track forum for resolving tax disputes, now finds itself at a critical crossroads. A proposed amendment by the National Assembly seeks to apply the strict provisions of the Evidence Act to TAT proceedings. While this might appear a step toward enhancing fairness and procedural rigor, many fear it could instead erode the Tribunal’s accessibility, efficiency, and people-centred foundation. This article explores the far-reaching implications of such a shift, drawing on comparative analysis, constitutional concerns, and practical realities in tax dispute resolution.
Understanding the TAT’s Role and Origins
The TAT was established under section 59 of the Federal Inland Revenue Service (Establishment) Act 2007 to adjudicate tax-related disputes arising from federal taxes including Personal Income Tax, Companies Income Tax and Value Added Tax between taxpayers and tax authorities such as the FIRS and State Boards of Internal Revenue. It was conceived as an administrative tribunal, deliberately designed to be independent of the judicial process and less formal than the regular courts. The Tribunal has operated successfully under its own procedural rules, known as the TAT (Procedure) Rules, which were fashioned to promote flexibility, speed, and accessibility.
Notably, the Tribunal’s processes have allowed for representation by accountants and corporate officers (not just lawyers) and enabled self-representation by taxpayers. This approach has democratized tax justice in Nigeria, enabling individuals and SMEs to challenge assessments without facing prohibitive litigation costs.
The Evidence Act Proposal: A Disruptive Shift
The proposed amendment to the Joint Revenue Board of Nigeria (Establishment) Bill 2024 by the National Assembly seeks to compel the TAT to fully comply with the Evidence Act. Originally, section 8 of the Second Schedule to the Bill provides that the “proceedings of the Tribunal and its decisions shall not be impeached for non-compliance with the strict provisions of the Evidence Act.” The National Assembly has modified the provision to read – “The proceedings of the Tribunal and its decisions shall be in compliance with the provisions of the Evidence Act.”
Under the proposed framework, critical evidence may be excluded on technical grounds, and witnesses may be subjected to formal rules of admissibility, hearsay, document authentication, and expert testimony that many tax professionals and business people are not trained to navigate.
While the intention behind this reform may be to bolster procedural integrity, its practical consequences could be dire. The Tribunal, which has historically been guided by principles of substance over form, will be forced into a rigid procedural framework more suited for regular courts.
Moreover, the very existence of the TAT is predicated on providing fact-focused tax adjudication, designed to distance the TAT and its procedures from the traditions of conventional courts, which are often rooted in technicalities, procedural rigidity, and strict rules of evidence – all of which invariably culminate in the slow pace of dispute resolution.
Implications of Strict Evidence Rules
Barrier to Self-Representation: By making proceedings more technical, the proposal threatens to exclude non-legal professionals and self-represented taxpayers, directly contradicting the inclusive intent of the TAT. Quite a sizeable number of appeals at the TAT involves self-represented taxpayers or those represented by officials of the taxpayers, highlighting the current accessibility.
Increased Costs and Delays: Strict evidentiary rules would necessitate professional legal representation, thereby escalating costs and slowing dispute resolution. On an average a tax appeal is concluded between six months and one year presently.
Risk of Procedural Over Substance Focus: The Tribunal may become bogged down in procedural arguments rather than focusing on the core tax issues. Arguments over the admissibility and form of evidence are time-consuming and often result in interlocutory appeals. Examples abound of such appeals lasting more than a decade.
Erosion of Tax Justice for SMEs: Small businesses and individual taxpayers (often without legal support) may abandon valid appeals due to cost and complexity, potentially limiting access to justice for those with limited financial resources.
Contradiction with Case Law and Precedent: Courts, including the Supreme Court, have consistently recognized that administrative tribunals like the TAT are not bound by the Evidence Act. In a 2016 ruling, the Tribunal itself reaffirmed that its adjudicatory framework is grounded in administrative, not judicial, logic.
Conflict with International Best Practices: Globally, tax tribunals are exempt from strict evidence rules to ensure that decisions are based on commercial realities rather than procedural technicalities. Countries like the United Kingdom and Canada embrace informal adjudicatory models in their tax tribunals.
Arguments for Applying the Evidence Act
Proponents argue that strict rules ensure procedural fairness, increase the reliability of evidence, and uphold due process. In high-stakes cases involving significant revenue, procedural integrity is seen as vital. However, these goals can be achieved through measured reforms without sacrificing the Tribunal’s efficiency and accessibility. Robust decisions can still be reached without slavish adherence to technical rules of admissibility.
The Tunnel Vision Trap
The current proposal suffers from “tunnel vision”—addressing one problem (evidentiary reliability) while ignoring systemic interdependencies. Reforming the TAT should not be approached piecemeal. Any legislative intervention must consider the full operational ecosystem of the Tribunal, including its founding rationale, rules of procedure, access to justice goals, and constitutional status.
Applying the Evidence Act without a corresponding reform in legal aid services, TAT personnel training, and representational rights will only exacerbate existing inequities.
Alternative Solutions
Rather than undermining the Tribunal’s foundational principles, there are alternative approaches that can enhance its effectiveness and uphold justice without resorting to the rigid application of the Evidence Act. These solutions offer a path to bolster procedural integrity and evidentiary standards while preserving the TAT’s crucial role as an accessible and efficient forum for tax dispute resolution.
Tailored Evidentiary Rules: Instead of wholesale application of the Evidence Act, Nigeria could adopt a hybrid model like the National Industrial Court Act, which allows departure from strict rules where justice demands.
Strengthen the Tribunal: Reinforce training, accountability, and consistency at the TAT rather than turning it into a full-fledged court.
Tax Court and Ombud Model: If the nation is firm on the application of Evidence Act to TAT proceedings, it may consider transitioning the Tribunal into a specialized Tax Court especially with the proposed a Tax Ombud which will handle administrative complaints—an approach that balances independence, expertise, and accessibility.
Use Tribunal Practice Directions: The Minister of Finance being the rule-making authority for the Tribunal could, on the recommendation of the Tribunal’s Chairmen, issue practice directions incorporating reasonable evidentiary safeguards without the rigidity of the full Evidence Act. This would preserve the Tribunal’s unique character while improving evidentiary standards.
Conclusion
At its heart, this debate is about the future of tax justice in Nigeria. Should the TAT be a people-centred administrative forum that resolves tax disputes swiftly and affordably, or should it mimic the courts with all their procedural formality and barriers? The proposal to apply the Evidence Act risks sacrificing access and equity at the altar of formality. Rather than undermining the foundational values that birthed the Tribunal, lawmakers must take a broader, more systemic view—preserving the TAT’s identity while improving fairness and integrity through targeted reforms.
It is critical to note that the position expressed by the Presidential Committee on Tax Policy and Tax Reforms, specifically in section 8 of the Second Schedule to the Joint Revenue Board of Nigeria (Establishment) Bill 2024, aligns perfectly with the fundamental principles of tax tribunals and international best practice. This reinforces the argument that the proposed legislative changes are a step in the wrong direction. Sectional interests should not always trump what is proper and beneficial for the broader populace and the efficacy of the tax system as a whole.
Effective tax dispute resolution must balance legal accuracy with accessibility. Procedural sophistication should not be a barrier to justice. As we contemplate the future of the TAT, let us ensure that it continues to serve not just the law, but the people for whom the law exists.
Olanrewaju Lassise-Phillip is a Legal Practitioner, former Chairman, Tax Appeal Tribunal Lagos. He is the author – “Nigeria’s Tax Appeal Succinctly Explained”.
