This second part of the video articles on intellectual property law highlights IP as it related to Nigeria’s Real Economy.
What is real economy sector?, Examples of real economy, Significance of IP in real sector:
Innovation Protection, Competitive Edge, Legal Security, Attracting Investment, Revenue Generation and Fostering Innovation Culture.
Watch video article below:
This first part of video articles on intellectual property law explains in simple terms the following:
What is intellectual property?, Intellectual property rights, Importance of Intellectual Property
Types of Intellectual Property, Intellectual Property Laws in Nigeria, Role of Lawyers in Securing Intellectual Property, Challenges in IP Protection.
Watch video article below:
SECTION 134 (1) of the 1999 CONSTITUTION provides that in order to be declared the winner of an election, a candidate running for the office of the President of Nigeria must:
a. Have majority of the votes cast in the election; and
b. He has not less than one-quarter of the votes [25%] cast in each of at least two-third of all States of the Federation [24 States] and the Federal Capital Territory, Abuja.
The 2023 General Federal Elections conducted on the 25th of February 2023, resulted in Asiwaju Bola Ahmed Tinubu, the Presidential Candidate of the All Progressive Congress as the winner of the election. However, the results as released by the Independent Electoral Commission [INEC] shows that he was not able to win up to 25% of the votes cast in the F.C.T. This has led to a debate on whether or not, he should be declared the winner, going by the interpretation of Section 134 (b) of the Constitution. There are 2 schools of thought on this:
1. A candidate needs to score 25% of the total votes in 24 States including the F.C.T.
2. A candidate needs to score 25% of the total votes in 24 States and 25% in the F.C.T too.
Section 6 of the Constitution establishes the Judiciary as the machinery charged with the interpretation of laws. Hence the Supreme Court, being the Apex Court is burdened with this enormous responsibility. In the celebrated decision of Awolowo v. Shagari [1979] Sc 62/1979, the locus classicus which establishes the use of Literal Rule in interpretation of statutes, the Supreme Court held that laws should be given their literal interpretation, especially where there is no ambiguity of any kind.
“When interpreting statutory provisions, it is correct, as submitted by learned counsel for the appellant, that the words used must be given their natural and ordinary meaning except where, to do so would lead to absurdity.”
However, in this instance, the words of the Constitution, though look simple, are quite capable of two different interpretations. As we all know, simple punctuations can render several meanings to a sentence. In the same vein, a statute can be drafted in such a way that it is capable of having different meanings. In such a situation, what should the Courts do? In the same Awolowo v. Shagari, the Court said:
It is also relevant, we think, to point out that anybody called upon to interpret any kind of statute should not, for any reason, attach to its statutory provision, a meaning which the words of the statute cannot reasonably bear. If the words used are capable of more than one meaning, then the person interpreting the statute can choose between these meanings, but beyond that he must not go…. “Judges are not called upon to apply their opinions of sound policy so as to modify the plain meaning of statutory words, but where, in construing general words the meaning of which is not entirely plain there are adequate reasons for doubting whether the legislature could have been intending so wide an interpretation as would disregard fundamental principles, then we may be justified in adopting a narrower construction.“
The Court was basically saying whenever a provision is capable of having two meanings, it would resort to picking one in so far as it is not going beyond both of them.
Furthermore, in a plethora of cases, the Courts have said that the intention of the draftsmen should be considered while interpreting laws, hence, a statutory provision is not given a wrong meaning. The Court of Appeal in P.D.P V. Edevbie [2022] Lpelr-58656 [CA], relying on Saraki V. F.R.N [2016] 3 Nwlr [Part 1500] Page 531, stated that the main object of statutory interpretation is to discover the intention of the lawmaker, which is to be deduced from the language used. But, the question is, how can we truly know and decipher their intentions especially in this particular situation?
The interpretation of Section 134 would have been so much easier if it used the word “including” rather than “and”. In this way, the meaning would be the candidate scoring 25% of the votes in 24 states including the FCT; thereby counting the FCT as the 37th State. But, it does not. Hence, this is subject to an alternative interpretation.
The buck stops at the desk of the Supreme Court. It can elect any of the possible meanings of Section 134 and it would be deemed right. This is because the plain interpretation of the Constitution can result to more than one meaning and in such scenario, the Court is enjoined to make a choice as long as it does not go beyond the possible meanings.
As said earlier, the Supreme Court has a heavy duty to discharge here. English Language is the latest hard nut the Court must crack. A battle of interpretation. Indeed, it is Grammar versus the Gavel.
TEAM VERNIA
52B, Adeyemo Akapo Street,Omole Phase I Estate,
Off Agidingbi Road, Ikeja, Lagos.
+234 813 830 6975
[email protected]
INTRODUCTION
The objective of every organized society’s government is to provide fundamental social amenities such as adequate roads, health, and security of people and property, amongst others. It is without any doubt that the government needs money to facilitate the provision of these services and taxation is the mainstay of government revenue. The law makes it compulsory for everyone to pay tax and even provides penalties for non-compliance. The payment of tax in Nigeria is backed by Section 24[f] of the 1999 Constitution of Federal Nigeria [as amended]. It provides that: “It shall be the duty of every citizen to – declare his income honestly to appropriate and lawful agencies and pay his tax promptly.”The court in the case of Independent Television/Radio v. E.S.B.I.R. [2015] 12 NWLR [Pt. 1474] 442 reiterated the constitutional duty of a citizen to pay tax. It stated that: “Failure of the citizen to pay tax shall strip him of the protection afforded by section 44[1] of the Constitution.”
In Nigeria, the power of the government to impose taxes is statutory and must be anchored on the law. There are sundry legislations in Nigeria of which the major ones are the Personal Income Tax Act, Company’s Income Tax Act, and The Federal Inland Revenue Service Act, amongst others
TAX AVOIDANCE
The 8th Edition of the Black’s Law Dictionary defined Tax Avoidance as “the act of taking advantage of legally available tax-planning opportunities in order to minimize one’s tax liability.” It is a lawful means of altering a person’s taxable income in order to reduce the amount of tax owed. It is usually achieved by claiming tax deductions, tax credits, and positioning for tax incentives. By and large, tax avoidance occurs in a situation where the taxpayer arranges his financial affairs in a manner that would make him pay the least possible amount of tax without infringing the legal rules.
TAX EVASION
This is the unlawful means of concealing taxable income from tax authorities, so as not to remit taxes. It has also been interpreted to mean an illegal practice where a person, organization, or corporation deliberately evades paying their authentic tax liability by deliberately not declaring all taxable income. Some instances of tax evasion are:
In Independent Television/Radio v. E.S.B.I.R. [2015] 12 NWLR [Pt. 1474] 442 where the taxpayer failed to render tax returns to the relevant tax authority, the court held that was “a despicable way for any taxpayer to act and it is seriously detrimental to the development of any nation.”
LEGAL DIMENSION OF TAX AVOIDANCE AND TAX EVASION
Legislators and tax authorities are very well aware of the way taxpayers seeks to avoid or evade taxes. Therefore, tax legislation and enforcement technique continue to evolve to prevent tax evasion and to ensure tax-avoidance techniques are based on real and reasonable economic activities. Here are some legal measures put in place to prevent tax evasion:
1. Imposition of Sanction: Judicial decisions have recognized deterrence as one of the goals of imposing sanctions. Without the imposition of sanctions for non-compliance with the tax laws, there would be no duty, but an admonition, to pay taxes. It is important to stress that Section 40 of the Federal Inland Revenue Service Act makes tax evasion illegal in Nigeria. Furthermore, obstructing or assaulting any authorized tax officer in the exercise of his responsibilities is a criminal offense under Section 41 of the Act. Any of these infractions attracts a fine or an imprisonment term of three years or both.
2. Tax Audit and Investigation: The law permits tax authorities to conduct tax audits and tax investigations of taxpayers.
3. Deduction at Source: There are two main methods of deducting taxes at source, the Pay-As-You-Earn scheme [PAYE] and the Withholding Tax method. Withholding tax is not a form of tax, but a method of collecting taxes in advance.
4. Reporting and Penalties: Reporting obligations on a controlled transaction or across the N300,000,000 thresholds. Failure to file the necessary disclosure or declaration forms attracts different monetary penalties.
5. The enactment and amendments of existing laws: With the enactment of the new Finance act, it is hoped that these new provisions will bring a lot of changes in the tax administration system.
CONCLUSION
The importance of tax to a nation cannot be overemphasized. It is one of the veritable ways by which the government funds its budget and in Nigeria currently, taxation is one sure way for the government to generate revenue. However, it is rare to find a taxpayer who willingly pays their taxes, and the law is very well aware of that. Hence, legal and regulatory measures are put in place to ensure that any advantages to be gained by a taxpayer over the tax authorities are not artificially induced or illegally procured. While reasons may be advanced to justify avoiding and evading taxes, there is no doubt that in both cases, the government whose anticipated revenue reduces suffers the loss which in turn passes to taxpayers through the increase in tax rates and creation of new forms of taxes.
TEAM VERNIA
52B, Adeyemo Akapo Street,Omole Phase I Estate,
Off Agidingbi Road, Ikeja, Lagos.
+234 813 830 6975
[email protected]
Introduction
On the 31st of December, 2021, Nigeria’s President, Muhammadu Buhari, signed the 2021 Finance Bill [which is now Finance Act 2021] into law. The Finance Act 2021 [hereinafter referred to as “the Act”], came with changes to the Nigerian taxation sphere and also touched on regulations. Through the Act, provisions in other legislations such as Capital Gains Tax Act, Personal Income Tax Act, Tertiary Education Trust Fund Act, Companies Income Tax Act, etc. were also amended. These changes consequently have effects on the running of business operations in Nigeria. Some of them include:1. Companies Income Tax [CIT]
Before the advent of the 2021 Act, organizations which were involved in educational activities enjoyed exemption from taxation. Now, by virtue of Section 7 of the Act, such companies are subject to Capital Income Tax [CIT].
2. Tertiary Education Tax Rate
The previous rate for the Tertiary Education Tax was capped at 2% on the assessable profit of companies registered in Nigeria; But according to Sections 28 & 29 of the Act, this has been increased to 2.5%. However, this tax does not apply to small businesses. Also, within 30 days of receiving a notice of assessment from the FIRS, any company subject to Tertiary Education Tax must pay within 30 instead of the 60 days which was obtainable under the previous dispensation.
3. Sugar Tax
The Act also amended the Customs, Excise Tariffs, Act [CETA] through the introduction of the so-called “Sugar Tax” in Section 21(3), CETA. This new provision imposes an excise duty of N10 per litre on non-alcoholic, carbonated and sweetened beverages. A rationale behind it is to discourage excessive consumption of sugar in beverages and drinks. This definitely, would have a rippling effect on companies manufacturing such beverages as they would be forced to increase the price of selling their products and consumers will bear the resulting brunt.
4. Capital Gains Tax
Previously, the Capital Gains Tax Act [CGTA], provided that capital gains which accrue to a person from the sale of shares or stocks could not be charged. However, as a result of Section 2 of the Act which amends Section 30 of the CGTA, now there is an imposition of Capital Gains Tax on gains earned from disposal of shares. This however has a certain financial threshold of N100 Million and other conditions which must be considered.
Conclusion
The Finance Act of 2021 has amended quite a number of statutes with the aim of making sure new taxes are now imposed on certain kind of transactions and business owners have no choice but to adapt to these modifications. As gleaned from the above, the new legislation may not necessarily be bringing good tidings for some businessmen. This is obviously due to the new taxes and duties levied on transactions which was not the case under the old dispensation.
TEAM VERNIA
52B, Adeyemo Akapo Street,Omole Phase I Estate,
Off Agidingbi Road, Ikeja, Lagos.
+234 813 830 6975
[email protected]