In this newsletter, the core discussion revolves around the jurisdictional conflict between the Tax Appeal Tribunal (TAT) and the Federal High Court (FHC) versus State High Courts regarding tax disputes, especially concerning revenues, like personal income tax (PAYE), collected by state governments. The case of Plateau State Internal Revenue Service v. Jos Electricity Distribution Plc is used to illustrate this.
The Court of Appeal’s ruling in this case clarified that the TAT and FHC do have jurisdiction over disputes relating to personal income tax and other federal taxes payable to a state government. However, they do not have jurisdiction over disputes related to revenues accruing to a state government via laws made by the state itself. The key distinction highlighted is between the “power to impose tax” (which lies with the federal government for income tax) and the “power to collect tax” (which states can do for federal taxes like PAYE). The newsletter concludes that this case provides a clear framework for resolving such jurisdictional challenges in tax litigation.
