September 22, 2020
One thing that makes legal and statutory interpretations interesting is the room for flexible interpretation of the same provisions by different bodies using different rules of interpretation. Undoubtedly, the Nigerian constitution makes provision for the role of each arm of government as well as other relevant stakeholders/citizens with respect to the making, interpretation and implementation of laws. Whereas the legislative arm is primarily empowered to make laws, the judicial arm interprets the laws while the executive arm is typically conferred with the power to implement the laws. Notwithstanding the above, agencies of the executive arm typically issue publications to clarify and guide the application of certain provisions which are sometimes legalistic in their original construct.
Over the years, some of these publications have been issued and are occasionally viewed by some members of the public as binding. However, these publications, at their best, remain the opinion of the administrative authorities and cannot assume the binding powers of legislative provisions.
In this article, we evaluate the legal value of administrative publications, citing certain clauses in the Federal Inland Revenue Service (FIRS)’ recent publications as practical examples.
The Call for Amendments versus Introduction of Finance Act, 2019 (FA)
Prior to the amendments introduced by the FA to the various taxing legislation, it had become clear to many tax administrators, consultants and taxpayers that some provisions of the tax laws were redundant and replete with ambiguity. Consequently, the revision of some of these provisions brought succour to the relevant stakeholders, especially because a number of amendments had been anticipated for many years.
It is, however, important to note that the FIRS had issued several Public Notices and Information Circulars in the intervening period to provide guidance on parts of the tax laws. While some of these provisions helped clarify grey areas in the tax laws, their authority remained questionable; thus, the need to amend the laws to provide certainty to taxpayers.
Notwithstanding the enactment of the FA to expunge some redundant provisions of the tax laws and revise provisions with inherent ambiguities, the FIRS still thought it necessary to provide additional clarification to the provisions of the FA. While a regular citizen may question the purpose of the Circulars issued by the FIRS pursuant to the FA, it is trite to say that Information Circulars typically attempt to use simple language to aid effective application of the laws.
However, certain issues have arisen following the issuance of the Circulars concerning the consistency or otherwise of their content vis-à-vis an objective interpretation of the FA. In fact, it appears that some of the contents of the Circulars were designed to provide interpretations that could result in additional tax collection rather than provide the much needed clarity.