By Toheeb Mustapha Babalola

Litigation is the process of resolving disputes through the court system in Nigeria. It is an adversarial process in which parties present their arguments and evidence to a judge or panel of judges, who then make a ruling on the matter.

Litigation in Nigeria is governed by various laws and rules of court, including the Constitution of the Federal Republic of Nigeria, the Evidence Act, and the Civil Procedure Rules. Litigation is an important means of enforcing legal rights and obligations, and it is often used to resolve disputes in various areas of law, including commercial law, labour law, and tax law. However, the process can be time-consuming and expensive, and it may not always result in a satisfactory outcome for all parties involved.

Litigation, which is the process of resolving disputes through the court system, is one of the methods available for the settlement of tax disputes in Nigeria. While litigation can provide an effective means of resolving disputes, it also has its prospects and challenges, particularly in the context of tax disputes in Nigeria.

Prospects of litigation as a means of settlement of tax disputes in Nigeria:

Legal framework: There is a well-established legal framework for litigation in Nigeria, which provides guidance on the process, procedures, and rules of evidence. This framework ensures that litigants are treated fairly and that their rights are protected during the dispute resolution process.
Judicial independence: The Nigerian judiciary is independent of the executive and legislative branches of government. This ensures that tax disputes are resolved impartially and without any undue influence from the government or other parties.
Precedent-setting: Litigation can lead to the establishment of legal precedents, which can guide the resolution of similar disputes in the future. This helps to ensure consistency in the application of tax laws and reduces the potential for future disputes.
Alternative dispute resolution: Litigation can also serve as a catalyst for alternative dispute resolution (ADR) mechanisms, such as mediation and arbitration. This is because parties may be more willing to explore ADR options after going through the litigation process.
Challenges of litigation as a means of settlement of tax disputes in Nigeria:

Lengthy and costly: Litigation can be a time-consuming and expensive process, especially in Nigeria’s court system, which is often bogged down by bureaucracy and delays. This can make litigation an unattractive option for taxpayers, particularly smaller businesses or individuals with limited financial resources.
Technicalities of tax laws: Tax laws in Nigeria can be complex and difficult to interpret, leading to lengthy and expensive court cases. This can result in disputes being tied up in the court system for years, further adding to the cost and burden of litigation.
Capacity of the judiciary: The Nigerian judiciary may be overburdened with a backlog of cases, leading to delays in the resolution of disputes. This can also result in cases being rushed through the system, which can lead to errors in judgment.
Corruption: Corruption is a significant challenge in Nigeria’s legal system, and it can affect the outcome of litigation. Bribery and other corrupt practices can undermine the integrity of the judiciary and erode public trust in the system.
In conclusion, while litigation can provide an effective means of resolving tax disputes in Nigeria, it is not without its challenges. Taxpayers should carefully consider the pros and cons of litigation before pursuing this option. Furthermore, the Nigerian government should take steps to address the challenges facing the court system, including increasing the capacity of the judiciary, reducing corruption, and simplifying tax laws to make them more accessible to taxpayers.

References:

Federal Inland Revenue Service. (2020). Tax dispute resolution mechanism. Retrieved from https://www.firs.gov.ng/tax-dispute-resolution-mechanism/
Aigbokhan, B. E., & Okoye, P. V. (2017). Appraising the efficiency of tax litigation in Nigeria. Journal of Accounting and Taxation, 9(9), 68-74.
Olugbenga, O. A., & Adeyemi, S. L. (2018). Taxation and revenue generation: a comparative analysis of Nigeria and other African countries. Cogent Business & Management, 5(1), 1-16.
Oyewunmi, O. A., & Oladipupo, A. O. (2017). Impact of tax litigation on tax revenue in Nigeria. Journal of Business and Management, 19(6), 24-31.
ABOUT THE WRITER

Mustapha is a driven and dedicated individual with a passion for law and a desire to make a positive impact in the world. He is a final year student at the prestigious Bayero University Kano and currently holds the position of the Chief Judge, Bayero University Student Union Court. He can be easily reached at 08106244073 or via email at [email protected].