For each of the past three years, the Federal Government of Nigeria has been consistent with enacting a Finance Act, with each enactment introducing some notable changes to the tax landscape. Apparently, this legislative attitude is aimed at containing the speedy pace of technological and global commercial changes. These changes to the tax system bring about fresh challenges unconnected with increase in tax disputes and disagreements which may only be settled before competent courts of record.
There is a proposal before the National Assembly to create a specialised Revenue Court modeled along the erstwhile Federal Revenue Court during the military regime of Yakubu Gowon, but distinct from the Federal High Court. This creation, they claim, would accelerate the resolution of teeming tax disputes. This article briefly journeys down the memory lane on the erstwhile Federal Revenue Court and subsequently examines the pros and cons of creating a specialised Revenue Court. It concludes that the advantages are a compelling basis for the prompt creation of a specialized Revenue Court.
Historically, the Federal Revenue Court (FRC) was established by the promulgation of the Federal Revenue Court Decree (“FRC Decree”). Section 1 of the FRC Decree indicated that the court that was established was FRC in form, but a federal High Court in substance. Therefore, the FRC was no specialized or exclusive tax court. It had jurisdiction to not only determine tax matters but also disputes arising from banking, foreign exchange and other fiscal measures, intellectual property, maritime and admiralty. Eventually, and true to its ideal character, the FRC was rechristened “Federal High Court” in 1979. Sections 228(1) and 230(1) & (2) of the 1979 Constitution were further reenacted as Section 251(1) (a-s) of the 1999 Constitution (as amended).
This rechristening did not completely phase out disputations on subject matter jurisdiction between state and federal high courts. The problem of non-specificity of tax jurisdiction between the federal high court and state high courts lingered. For instance, as recently as 2013 and 2016, two matters were instituted before the High Court of Lagos State bordering on one issue – the jurisdiction of the state high court as against the federal high court – but gave rise to contrasting judgments.
In August 2021, the Federal Inland Revenue Services (FIRS) submitted a Bill seeking the establishment of a specialized federal revenue court before the House of Representatives for consideration. The Bill seeks the removal of the powers to adjudicate on tax matters from the Federal High Court. Particularly, the Bill reads as follows:
“The Federal Inland Revenue Service (FIRS) hereby proposes the insertion of Section 254G to 254L in the 1999 Constitution of the federal republic of Nigeria (FRN) to provide for the establishment of Federal Revenue Court (FRC), the appointment of chief judge (FRC), power to make rules for the proceedings of the (FRC) and the Appointment of judges of the (FRC), Exclusive Jurisdiction of (FRC) on Federal Tax Matters”.
Notably, Nigeria has never had a superior court of record conferred with exclusive jurisdiction to adjudicate tax disputes.
Pros and Cons of a Specialised Revenue Court
Both the Federal High Court and the state high courts have respective jurisdictions over tax matters. As such, the merits, and demerits examined under this heading not only apply to a specialised FRC but also a specialized revenue court at state levels.
Firstly, professional taxation especially as it pertains to resolution of tax disputes should move with the constantly changing global dynamics of commerce and technology. A specialised court for tax matters would be well equipped to withstand the impact of these inevitable changes for the benefit of the tax system. The judges, who would obviously be distinguished tax experts, would adjudicate and need to continually upskill on mainly revenue and tax matters. Specialised tax judges are also better equipped in terms of background legal training, historical and cultural jurisprudence of taxation concerning different tribes, races and economic milieus, and resources to comparatively study tax systems and adopt relevant ideas. This would lead to improved quality of revenue and tax decisions, translating into an improved fiscal reputation in the comity of nations.
The emergence of the Tax Appeal Tribunal (TAT) appears to have reduced the quantum of tax matters handled by the FHC especially because some matters do not go beyond the TAT level. Clearly then, a specialised Revenue Court would further decongest the dockets of the Federal High Court, reduce the backlog of pending tax matters (possibly even remove revenue-related matters completely from the FHC), and accelerate the conclusion of tax disputes. This would lead to significantly improved ease of doing business indices.
Moreover, specialised tax judges would make tax dispute resolution practice less burdensome and more fascinating for lawyers, tax accountants and auditors. They would not need to be verbose or tiresomely exhaustive in their explanations and contentions to the judge, unlike in the case of a generalist judge. Further, the number of judge hours required to process complex tax matters will be significantly reduced.
Meanwhile, in practice, unlike generalist courts, specialised courts are usually situated in a one-per-state or one-per-geopolitical zone pattern. This may limit access to tax justice for not-so-rich litigants. Even for rich litigants, it could create a burden for them. This can be obviated by the deployment of virtual and teleconferencing technology.
More so, specialized tax judges may become so one-sided and limited in knowledge to the specific subject of taxation alone. Experience shows that some disputes that seem tax and revenue-related on the surface are actually very complex and convoluted, traversing such other areas as blockchain technology, cryptocurrencies, intellectual property and valuation, transportation, sports, and athletics, et cetera. This could cause judgments to lose that touch of uniqueness that results from analysing tax matters/issues from a versatile and broad point of view.
Similarly, the lingering problem of non-specificity of tax jurisdiction between the federal and state high courts, if not addressed, may bedevil the specialised revenue court. The FIRS’ Bill seeks to amend the Nigerian Constitution such that all judicial powers currently enjoyed by the Federal High Court would be conferred on the specialised revenue court. There is an issue though that is also worth the attention of both the FIRS and the National Assembly, and it is briefly explained in the next paragraph.
The Constitution gives the Federal High Court exclusive jurisdiction to hear matters pertaining to “revenue accruing to the Federal Government“. The same Constitution clothes the state high courts with original and general jurisdiction to hear all civil matters not expressly provided for by the Constitution or an Act of the National Assembly. The Federal Inland Revenue Service (Establishment) Act (FIRSEA) meanwhile provides for the original jurisdiction of the TAT to hear disputes arising from the administration of Personal Income Tax Act (PITA) to the exclusion of the state high courts. A fortiori, appeals from the TAT lie solely to the Federal High Court, which constitutionally has jurisdiction to hear only tax matters pertaining to revenue accruing to the Federal Government.
Meanwhile, a combined and objective reading of sections 251(1)(b) and 272 of the 1999 Constitution (supra) of the first part, sections 58 and 60 of PITA of the second part, and section 59 and Item 11 of the FIRSEA of the third part, would reveal that nothing in any of these laws ousts or partially negatives the jurisdiction of state high courts to adjudicate tax issues not related to federal fiscal revenue, especially PIT. Indeed, this legal reasoning aligns with the decision of the Court of Appeal in Access Bank Limited v. Edo State Board of Internal Revenue where the court ruled that the Federal High Court does not have the constitutional or statutory jurisdiction to hear any matter pertaining to or connected with the revenue of a state. This is an issue that potentially confronts the specialised revenue court.
In addition, the possibility of diversion of funds that should be applied towards strengthening the judiciary stands as a stumbling block for the creation of a specialized revenue court. Tax claims and disputes have huge revenue generation potentials. Filing fees and other administrative costs are usually prorated based on claims with some tax assessments valued at hundreds of billions of naira. Overtime also, the government may develop inordinate bias and may favour the funding of specialised revenue courts over and above other courts, due to their potential to generate more revenue for the government of the day.
With proper mechanisms of checks and balances, the advantages of creating a specialised Revenue Court far outweigh the disadvantages. Also, though the jurisdiction of the state high courts to determine disputes pertaining to or connected with the fiscal revenue of a state government as against the federal high court’s jurisdiction may appear inferable, there is a need to clearly settle any controversy that may arise therefrom by way of a legislative review. The fact that the creation of the revenue court is currently in contemplation brings optimism in this regard.
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 Associate, Tax, Real Estate and Succession, SPA Ajibade & Co, Lagos, Nigeria.
 No. 13, 1973.
 Section 7, FRC Decree.
 See Section 228(1) and Section 230(1) & (2) of the 1979 Constitution. Section 230 of the 1979 Constitution was replicated in the Federal High Court Decree (Amendment) 1991 which effectively amended section 7 of the Federal High Court Act 1973 and conferred exclusive jurisdiction on the Federal High Court on tax and other matters.
 Chemiron International Limited v. LIRS (https://andersentax.ng/lagos-state-high-court-rules-on-power-to-determine-matters-relating-to-personal-income-tax/#:~:text=On%2020%20June%202018%2C%20in,a%20court%20of%20first%20instance accessed on 27th January 2022 at 2:20 pm), and LIRS v. Ecoserve Limited (https://mikedugeri.wordpress.com/2019/01/14/tax-tax-appeal-tribunal-has-original-jurisdiction-to-determine-matters-relating-to-personal-income-tax/ accessed on 27th January 2022 at 2:21 pm).
 You can access our article titled Nigeria: Jurisdiction of the State High Courts on Tax Matters here: <https://www.mondaq.com/nigeria/withholding-tax/1021162/jurisdiction-of-the-state-high-courts-on-tax-matters> accessed on 27th January 2022 at 11:03 am.
 (2018) LPELR-44156(CA).