By Unini Chioma 

*Reaffirms That It Is Exclusive Preserve Of The National Assembly To Amend Statutes

A high court sitting in Lokoja, Kogi State, has held that it is unconstitutional for Kogi State government and the Attorney General does not have the power to make laws imposing taxes and Levies that are inconsistent with the Constitution.

The court declared the amendment to the schedule of the Taxes and Levies (Approved List for Collection) Act by the Honourable Minister of Finance and the Economy as unconstitutional, null, and invalid.

Justice Alaba Omolaye-Ajiley, gave this judgment on 22nd July, in the SUIT No: HCL/03/2020.

ATC Nigeria Wireless Infrastructure Limited dragged Attorney General of the state, Kogi State Government and Kogi State Board of Internal Revenue to court for unlawfully demanding the sum of N217, 200,000 as a Social Services Contribution Levy, Covering the period of 2017 to 2019.

The Claimant in 2020 challenged the legal propriety and legality of a charge demanded by the 3rd Defendant as Social Services Contribution Levy placing reliance on Section 31(1), 32 (4), Item 5b of the Kogi State Board of Internal Revenue, Administration, Harmonization of Taxes, Duties, Rates, Fees and Charges due to the State and Revenue Appeal Tribunal Law, 2017.

The plaintiff claimed the following reliefs:

A DECLARATION that the 1st and 2nd Defendants have no power under the 1999 constitution of FRN to make any law imposing taxes and/ or levies on the Claimant that is inconsistent with the letter and spirit of the Constitution and the taxes and the levies( Approved List for Collection)Act Cap TN LFN 2004.

A DECLARATION that the provision of Section 31(1), 32(4) Item 5b in the Schedule thereto of the Kogi State Board of Internal Revenue, Administration, Harmonization of Taxes, Duties, Rates, Fees and Charges due to the State and Revenue Appeal Tribunal Law 2017 are inconsistent with the Second Schedule, Item 32 and 59 under the Exclusive Legislative List to the Constitution of the FRN 1999, (as amended) and therefore invalid, unconstitutional, null and void and of no effect whatsoever.

A DECLARATION that the imposition and demand of the sum of N217, 200, 000, only from the Claimant by the 3rd Defendant as Social Services Contribution, the levy pursuant to Section 31(1), 31(4) Item 5b in the Schedule thereto of the Kogi State Board of Internal Revenue, Administration, Harmonization of Taxes, Duties, Rates, Fees and Charges due to the State and Revenue Appeal Tribunal Law, 2017 is Ultra Vires the 1st and 2nd Defendants and therefore illegal, unconstitutional, null and void.

AN ORDER restraining the Defendants from giving effect or purporting to give effect or continuing to give effect to the Kogi State Board of Internal Revenue, Administration, Harmonization of Taxes, Duties, Rates, Fees and Charges due to the State and Revenue Appeal Tribunal Law, 2017 against the Defendants.

AN ORDER nullifying the imposition and demand of Social Services Contribution Levy by the Defendants from the Claimant for being unconstitutional, null, and void.

AN ORDER of perpetual injunction restraining the Defendants, their agents, servants or privies from further imposing, demanding or harassing the Claimant to pay Social Service, Contribution Levy.

Learned Silk Counsel, to the Claimant, Mr Tawo Tawo SAN, argued that the law relied upon by the 3rd Defendant to levy the tax on the Claimant is prima facie inconsistent with the provisions of the 1999 Constitution with respect to taxes and levies and thus of no moment. He further submitted that the Taxes and Levies (Approved List for Collection) Act Amendment Order made by the Coordinating Minister for the Economy and Minister of Finance vide a Federal Official Gazette which classified “Social Services Contribution Levy” as one of the levies or taxes that can be demanded by State Government and upon which the Kogi State Board of Internal Revenue, Administration, Harmonization of Taxes, Duties, Rates, Fees, and Charges due to the State and Revenue Appeal Tribunal Law, 2017 is predicated has not given the 2nd defendant the powers to impose Social Services Contribution Levy on corporate entities, especially with the inclusion of the phrase “where applicable” in the amendment. He contended that the social responsibility levy under the Amendment Order only applied to individuals and not corporate entities.

He further submitted in his argument that the Amendment Order was unconstitutional as an Act/Statute by the contemplation of the Constitution can only be amended by legislative process, and it is not within the intendment of the drafters of the constitution to have Acts/Statutes enacted by the National Assembly amended by Ministerial Orders.

In defence, the Defendants argued that the Social Services Contribution Levy does not fall within the Exclusive List, thus, the State government enjoys constitutional leeway to make laws with respect to such tax category.

They submitted that the National Assembly can only legislate on taxation of incomes, profits, and capital gains under item 59 of the Exclusive Legislative List of Constitution of the Federal Republic of Nigeria, 1999. They argued that the Social Services Contribution Levy come under the Residual Legislative List which the 2nd defendant can legislate on.

In determining the issues crystallised for determination by the parties and the arguments canvassed by counsel, the court deemed it proper to consider the constitutionality or otherwise of the act of the Minister for Economy and Finance in amending the Schedule of the Taxes and Levies (Approved List for Collection) as the said amendment formed the fulcrum and basis for the enactment of the Kogi State Law

Justice Alaba Omolaye-Ajiley, in his judgment, resolved issues 2, 3,4, and 5 in favour of the Claimant and also granted the reliefs sought by the Claimant.

He held: “I hold that when the 1st and 2nd Defendants proceeded to legislate on taxes and levies the Kogi State Board of Internal Revenue, Administration, Harmonization of Taxes, Duties, Levies, Rates and Charges due to the State And Revenue Appeal Tribunal Law, 2017 and included Social Services Contribution Levy( Section 32(5) in the list, which is outside the prescribed list contained in the original Section to Taxes and Levies(Approved List of Collection) Act, they were exercising powers that are ultra vires their powers.”

He further declared that ” the 1st and 2nd Defendants have no power under the 1999 con6of the FRN as amended to make any law imposing taxes and Levies that are inconsistent with the Constitution and taxes and levies (Approved List of Collection) Act 2004.

“That Section 31(1) and 32(4) Item 5(b) and Schedule thereto Kogi State Board of Internal Revenue, Administration, Harmonization of Taxes etc Law 2017 made pursuant to Part II Item 24 of the Schedule to the Taxes and Levies (Approved List of Collection) Act Amendment Order 2015 which was made pursuant to Section 1(2) of the Taxes and Levies (Approved List of Collection) Act, 2004 are unconstitutional.

“The Imposition and demand of N217, 200,000 (Two Hundred and Seventeen Million, Two Hundred Thousand Naira) from the Claimant by the 3rd Defendant is ultra vires the Defendants.