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When Malami decided to be Fowler

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Attorney-General of the Federation, Abubakar Malami (SAN)

Very often when the word ‘impunity’ is used in Nigerian commentary, it seems the intention is for it to mean that something is done recklessly and without regard for the law. The more widely accepted definition appears to be closer to a lack of consequences or punishment for actions carried out. In either case, the word is relevant to public officials who act beyond or without regard to the powers conferred on them by law. Either way, a questionable act is done and consequences either do not or are contrived not to follow.

Some might say it applies to the office of the Attorney-General of the Federation which, last year, took the unprecedented step of serving a tax demand notice on mobile network operator, MTN Nigeria. Even though the Federal Board of Inland Revenue (or the Federal Inland Revenue Service) is the “constituted authority” for tax matters, the AGF’s office purportedly assessed deficits of around N242 billion and $1.3billion in MTN’s import duties, withholding tax and value-added tax and demanded corresponding payments from the company.

Following receipt of the AGF’s demand notice, MTN challenged the AGF’s authority to deal with tax and custom duties, contending that oversight fell to the FIRS and the Customs Service, respectively. In a surprising move given the Buhari administration’s aversion to ‘technicalities’, rather than clear the air around a matter that was inherently contentious and seek to establish beyond doubt that the AGF had acted lawfully, his office filed a preliminary objection. According to them, MTN’s action was statute-barred under the Protection of Public Officers Act (POPA) and should not be entertained by the court.

What was more surprising was the argument underlying the AGF’s preliminary objection. POPA prevents public officers from being sued later than 3 months from the date of the act being complained about. The AGF contended that time began to run for MTN on the 21st of May 2018, when his office first wrote to MTN to demand a self-assessment and not, as was MTN’s contention, that the proper date was the 23rd of August 2018, when a formal demand notice was served. Someone there thought it was a decent argument to test.

This past week, the court ruled on the AGF’s preliminary objection, rejecting the arguments advanced for it and dismissing it in its entirety. The judge stated that the point at which there existed a party to sue and a matter for which to sue the party was on receipt of the demand notice of the 23rd of August 2018. MTN’s lawsuit was filed only 19 days later.

To digress slightly, although the POPA is ‘good law’ to the extent that it is validly on our statute books and has yet to be repealed by the National Assembly, the preponderance of legal opinion, with some support from the Bench over the course of many judgements on the applicability of the law, is that is a relic of colonial times and can often lead to real justice not being done – the public officer does not have to argue that he or she has not wronged the plaintiff, he or she is protected once the three month period has passed.

In the MTN matter, the court will now hear the substantive case on the AGF’s authority to step into the shoes of the FIRS and the Customs Service. The merits or demerits of the case aside, this whole affair should cause the Federal Government some concern. It is an administration that wants to believe it is creating an investment-friendly climate for businesses but it is about to inadvertently set the precedent for State Attorneys-General that they too are free to add an extra layer of taxation and regulation for businesses. This does not tally with the government’s long-stated stated desire to eliminate multiple taxation.

It is unclear why the AGF did not choose to route any concerns through the relevant tax assessment and collection bodies for further investigation. It is peculiar, or perhaps telling, that these typically territorial agencies have been quiet about the whole affair. And, perhaps, some might argue that this is a lot of fuss over nothing as MTN has just announced another set of impressive results for its past year. However, as is usually the case with this column, it is a question of principles and precedents.

Very few companies have the resilience of MTN and events of this nature could easily lead to loss of share price and stakeholder confidence in many other corporate entities. Regulation can simultaneously be robust, transparent, fair and reasonably predictable. These should be the pillars of the government’s overarching regulatory policy.


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FIRSMTN NigeriaPOPA
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