Anti-avoidance legislations: issues & doubts in the application of tax rules in nigeria

• Author: Muhammed Taofiq AbdulRazaq - Ibrahim Adam Kayode
• Position: LL.B, PhD (ABU), LL.M (Lond.), B.L. FCII, FCIB - LL.B (BUK), LL.M (OAU), Ph.D. (IIU, Malaysia)
• Pages: 1-14

AGORA International Journal of Juridical Sciences, http://univagora.ro/jour/index.php/aijjs

ISSN 1843-570X, E-ISSN 2067-7677

No. 4 (2015), pp. 1-14

1

ANTI-AVOIDANCE LEGISLATIONS: ISSUES & DOUBTS IN

THE APPLICATION OF TAX

RULES IN NIGERIA

M.T. Abdulrazaq

1

K.I. Adam

2

Professor Muhammed Taofiq AbdulRazaq

LL.B, PhD (ABU), LL.M (Lond.), B.L. FCII, FCIB. Professor of Revenue Law, Faculty of

Law, Lagos State University, Lagos, Nigeria and can be reached by email @

mtabdulrazaq@gmail.com.; Hand Phone No. +2348179033202

Dr. Kayode Ibrahim Adam

LL.B (BUK), LL.M (OAU), Ph.D. (IIU, Malaysia), Senior Lecturer, Department of Business

Law, University of Ilorin, Ilorin, Nigeria and can be reached by email @

adam_kayus2003@yahoo.com; .; Hand Phone No. +2347056125875

Abstract

For close to what seems a millennium, tax avoidance activities have plagued global

tax jurisprudence especially in Nigeria where legislative and judicial solutions to it have

remained illusory. This paper represents an attempt to analyse issues and doubts that trail the

application of anti-avoidance provisions in Nigeria.

Keywords: tax avoidance, anti-avoidance provisions, fictitious transactions,

characterization of facts, preplanned events, substance over form

1 Introduction

It is fit and proper in the course of the millennium to take stock of an issue that has

plagued tax jurisprudence since 1936 and Nigerian tax law since 1961 when the Income Tax

Management Act was promulgated

3

. The purpose of this work therefore is to attempt a

comparative analysis of anti-avoidance legislations and its application in the light of the

present nature of tax law in Nigeria.

4

2 Anti-Avoidance Legislations

Anti-avoidance legislations are statutory provisions which seek to prevent an escape

from liability to tax payer using artificial or fictitious transactions to dodge tax. The escape of

liability usually involves no criminality.

5

Anti-avoidance legislations are fairly common in most countries and the following are

examples of countries where they are applicable.

6

1

LL.B, PhD (ABU), LL.M (Lond.), B.L. FCII, FCIB. Professor of Revenue Law, Faculty of Law,

Lagos State University, Lagos, Nigeria and can be reached by email @ mtabdulrazaq@gmail.com.

2

LL.B (BUK), LL.M (OAU), Ph.D. (IIU, Malaysia), Senior Lecturer, Department of Business Law,

University of Ilorin, Ilorin, Nigeria and can be reached by email @ adam_kayus2003@yahoo.com.

3

See section 14 of the 1961 (ITMA)

4

See generally Abdulrazaq M.T. (1991) Legislation Against Tax Avoidance: The Nigeria Experience Justice:

Journal of Contemporary Legal Problems Vol.2 No.9 pp.33-46 (Federal Min istry of Justice).

5

Abdulrazaq M.T. (1992) Th e Legal Nature of Tax Evasion and Avoidance, Nigerian Financial Review Vol.4.

No.3 pp.65-74 (Infodata Publication).

6

See Tax Law in the Melting Pot (1985 ) Appendix 1 (The law Society of England and Wales).