Court Rejects Duplication of National Revenue Account

The Federal High Court in Abuja has described as unconstitutional the provision of the Finance Act 2021 that allows the Minister of Finance to create another account into which revenue can accrue.

The court has also ruled that the minister cannot make regulations relating to the allocation and distribution of arrears of the relevant stamp duty and electronic money transfer levies collected between 2015 and 2019.

Justice Taiwo O. Taiwo of the Federal High Court Abuja in his ruling in case brought before him by the Revenue Mobilisation Allocation and Fiscal Commission (RMAFC) challenging some amendments to the Finance Act 2021 granted the Commission all its prayers.

Justice Taiwo ruled that section 4(2) of the Finance (control and management) Act as contained in the Finance Act 2021 is invalid, unconstitutional, null and void in so far as it purports to empower the minister of finance to create accounts for the purpose of transferring monies due to the Federation Account by whatever name such account may be called, including “relevant Special Purpose Account”.

Section 4(3) of the  Finance (Control and Management) Act as contained in the Finance Act 2021 are invalid, unconstitutional, null and void in so far as it purports to criminalise the activities of the RMAFC.

On Stamp Duty, Justice Taiwo O Taiwo ruled that Section 89(3) of the Stamp Duty Act as contained in the Finance Act 2021 is invalid, unconstitutional, null and void in so far as it purports to subject or usurp the powers of RMAFC to the regulations made by the minister of finance.

This is in respect of allocation and distribution of revenue arrears of levies, Stamp Duties accruing to the federation in the light of the Constitution of the Federal Republic of Nigeria.

Concerning Section 89(3) of the Stamp Duties Act as contained in the Finance Act 2021, the Judge ruled as it invalid, unconstitutional, null and void as it purports to enable the minister of finance to make regulations in respect of allocation and distribution of the arrears of the relevant stamp duties and electronic money transfer levies collected between 2015 and 2019 fiscal years.

In the case of Section 4(1) of the  Finance (Control and Management) Act  in the Finance Act 2021, the Judge ruled as invalid, unconstitutional, null and void attempts to subject the powers and functions of RMAFC to the rules, regulations, guidelines and other instruments that may from time to time be issued by or under the direction of the minister of finance in respect of allocation and distribution of arrears of relevant stamp duties and electronic money transfer levies collected between 2015 and 2019 fiscal years.

The provisions of the amendments to Section 81(1) of the Federal Inland Revenue Service (FIRS) (Establishment) Act 2007 as contained in the Finance Act 2021 was declared invalid, unconstitutional, null and void for being inconsistent with the combined effects of Sections 153, 160, 162 and paragraph 32 of the third schedule to the constitution.

This means that the FIRS Act 2007 and the Finance Act 2021 are subject to the powers of RMAFC and denoted by the constitution of the Federal Republic of Nigeria 1999 as amended.

It was ruled that the provisions in the amendments to Sections 68(3) and 68(6) of the FIRS (Establishment) Act 2007 has contained in the Finance Act 2021 are inoperable, invalid, unconstitutional, null and void as long as they are inconsistent with the combined effects of Sections 153, 160, 162 and paragraph 32 of the third schedule to the constitution of the Federal Republic of Nigeria 1999 as amended.

This is because the said provisions purports to criminalise the activities of RMAFC as a constitutional body in respect of its functions of supervision and monitoring of the administering, assessment, collection, accounting or enforcement of taxies and levies due to the federation and the federal government of Nigeria.

The Judge noted that by virtue of the Sections 160, 153, 162, 163 and paragraph 32 of Part 1 of the third schedule to the constitution of the Federal Republic of Nigeria, no Act of the National Assembly that is Finance Act 2021 can criminalise the activities of a constitutional body such as RMAFC therefore the function of the Commission or its officers cannot be said to be “committing an offence” as envisaged by the provisions Sections 68 (3) and 68(6) of the FIRS Act as contained in the Finance Act 2021.

Justice Taiwo O Taiwo described Section 63(5) of the FIRS (Establishment) Act 2007 as contained in the Finance Act 2021 as inoperable, invalid, unconstitutional, null and void as long as it purports to impose mandatory obligation on RMAFC to report to the minister of finance any incidence requiring tax investigation, enforcement or compliance in the course of the performance of its functions.

Put simply, the RMAFC is not answerable to the minister of finance in the performance of its constitutional functions.