Financial services Consultant, PricewaterCoopers (PwC), has expressed concern over a provision in the recently issued Tax Appeal Tribunal (Procedure) Rules, saying it abridges the right of an appellant to fair hearing. The firm also branded Order 3 Rule 6 of the Tax Appeal Tribunal (Procedure) Rules 2021 as one that conflicts with the provisions of the Federal Inland Revenue Service Act, stating that the provision is susceptible to abuse by tax authorities.
Order 3 Rule 6 of the TAT rules, approved on 10 June by the Minister of Finance, Budget and National Planning, Mrs. Zainab Shamsuna Ahmed, requires a taxpayer disputing a tax assessment to make a security deposit of 50 per cent of the tax bill in dispute before filing an appeal at the tribunal. Analysing the provision in Tax Alert published on its website, PwC stated that the 50 per cent requirement to be paid of a yet to be determined tax liability inhibits the right to fair hearing and justice in addition to conflicting with an enabling law.
“One area of contention is the requirement for the payment of 50 per cent of the disputed tax as a condition precedent to filing an appeal. This provision may be challenged on grounds of inconsistency with the Federal Inland Revenue Service (Establishment) Act 2007 since it is established that rules cannot override the provisions of an Act.
”In addition, the provision may also be challenged on constitutional grounds where a taxpayer does not have the cash to deposit, as this would be a bar on access to justice.
There are also concerns that the provision is susceptible to abuse by tax authorities who may raise unreasonable assessments in the expectation that a taxpayer would pay 50 per cent deposit,” wrote PwC.