The unfortunate alteration of the Tax Administration Act: Let us thread with care!

By Muhammad Nami

We woke up to a shocking report from the National Assembly that specific provisions of the Tax Administration Act had been amended by an unidentified group before the legislation was gazetted by the government. The implication of this unfortunate act by the yet-to-be-identified persons is that the actual legislation passed and signed by the president differed from that which was eventually gazetted. In other words, the legislation was significantly altered at the point of gazetting without the knowledge of the presidency or the national assembly.

The occurrence of this incident is not only unusual but also regrettable, as it marks the first time in our country’s history that such an incident has happened. This calls for a proper and unimpeded investigation, as well as the prosecution of the perpetrators. Those found culpable must be punished accordingly.

What is even more strange and disturbing about all this is the call by some people for a protest against the government for a crime it probably had no hand in.

Unfortunately, such a call is being made despite the critical challenges we already face in Nigeria, including insecurity, budget deficits, and government borrowing to finance these deficits, among others.

It is equally disturbing and confusing that someone is calling for a stakeholders’ consultation on a document that was criminally and arbitrarily altered by a yet-to-be-identified set of individuals. Some are even asking that those beautiful documents ( the amended tax laws) that are a result of our painstaking research, investment, and legal process by NASS that started in 2022, be swept under the carpet.

We have on our hands a group of people who criminally altered a legal document and another set of individuals who appear to be operating like a government within a government. In this case scenario, we can not afford to take sides with any of them.

Need I say that Nigeria is the only country we have, and we must do everything possible to ensure peace and the protection of the lives and property of all citizens, as well as commit to its progress.

In light of this, our best option in this crisis time is to stand firm with the NASS. They are verifiably doing their best to ensure that there is peace in our country; they are working hard to ensure that all efforts and resources invested in the tax reforms project thus far is not wasted, and that, come January 2026, we can implement the new tax provisions that are needed to block leakages in our tax system, generate revenue to fund our economic growth and developmental programmes, fund debt servicing and budget deficits by the government at all levels, initiate social welfare programmes, provide security and build world class infrastructure, attract foreign direct investment in our economy.

Indeed, numerous provisions encourage governments at all levels to prioritise taxing prosperity over poverty and fruits over seeds so that SMEs can grow and provide employment opportunities to our youth, ultimately becoming taxpayers in the future.

NASS Committee on the Review of the Alterations.

 The Committee’s review ( though the source of the report is yet to be confirmed) was supported by forensic comparisons and independent legal opinions, and it has established that:

•⁠ ⁠Substantive provisions were inserted, deleted, or modified after

passage by both Chambers.

•⁠ ⁠Several oversight, accountability, and reporting mechanisms

approved by Parliament were removed in the final Acts.

•⁠ ⁠New coercive and fiscal powers (e.g., arrest powers, garnishee

without court order, compulsory USD computation, appeal

security deposits) appeared without legislative approval, and that

•⁠ ⁠These changes, which cannot be classified as clerical or editorial corrections, are deplorable.

Constitutional Implications

If the above is true, then there are constitutional consequences; that

•⁠ ⁠Sections 4 and 58 of the 1999 Constitution vest law-making

power exclusively in the National Assembly.

•⁠ ⁠The executive or any person purporting to act on behalf of the executive has no constitutional authority to alter a bill after passage.

•⁠ ⁠Any post-passage alteration is ultra vires, unconstitutional, and

void to the extent of the alteration.

•⁠ ⁠Affected provisions are vulnerable to judicial invalidation, creating legal and fiscal uncertainty.

Way forward for the NASS and the Federal Government

A. NASS should consider passing a resolution for the outright cancellation of the gazetted Tax Administration Acts.

B. NASS should also consider passing a resolution prevailing on its committee on the review of the alterations to jointly work with the executive team to gazette the actual law passed by the two chambers.

C. Thirdly, NASS should thoroughly investigate the circumstances that might have led to the unilateral action of the few, those involved, prosecute and punish them in line with the provisions of the Constitution of the Federal Republic of Nigeria and other laws of the land.

D. The Executive should prevail on the FIRS to halt the regulations and information circulars already prepared and ready for release to the public to prevent further damage and confusion in the tax system.

Muhammad Nami is the immediate past Executive Chairman of the Federal Inland Revenue Service, the Joint Tax Board, and President of the Commonwealth Association of Tax Administrators (CATA).