The Nigeria Finance Act 2022 introduces significant changes to the tax landscape, including a revamped tax dispute resolution mechanism. Effective dispute resolution is essential for fostering a business-friendly environment and ensuring fairness in taxation. In this article, we will explore the key aspects of the tax dispute resolution provisions under the Nigeria Finance Act 2022 and provide insights into how taxpayers can navigate this revamped system.
- Alternative Dispute Resolution (ADR) Procedures:
The Act places a strong emphasis on Alternative Dispute Resolution (ADR) procedures, allowing taxpayers to resolve tax disputes without resorting to lengthy litigation. ADR methods include negotiation, mediation, and conciliation.
Implication: Taxpayers should consider engaging in ADR procedures as a first step in resolving disputes, potentially saving time and resources compared to traditional litigation.
- Tax Appeal Tribunal (TAT):
The Act establishes the Tax Appeal Tribunal (TAT) as the primary forum for resolving tax disputes at the appellate level. TAT provides an independent platform for taxpayers to challenge decisions of the tax authorities.
Implication: Taxpayers should be aware of their rights to appeal to the TAT and should seek legal representation if necessary to present their case effectively.
- Establishment of the Tax Dispute Settlement Panels (TDSP):
The Act introduces Tax Dispute Settlement Panels (TDSP) for the resolution of transfer pricing disputes. TDSPs consist of experts in transfer pricing, providing specialized knowledge for fair resolution.
Implication: Businesses engaged in related-party transactions should be prepared to engage with TDSPs in case of transfer pricing disputes and ensure their documentation is in order.
- Time Limits for Dispute Resolution:
The Act sets specific time limits for the resolution of tax disputes at various stages. This is intended to expedite the resolution process and reduce delays.
Implication: Taxpayers and tax authorities should be vigilant in adhering to the prescribed time limits to ensure timely resolution of disputes.
- Appeal to the Federal High Court:
In cases where a party is dissatisfied with the decision of the TAT, they can further appeal to the Federal High Court. This provision ensures that disputes can be escalated to the judicial system if necessary.
Implication: Taxpayers should be aware of their right to appeal to the Federal High Court and be prepared for the possibility of litigation.
- Expert Advice and Representation:
Given the complexity of tax disputes, taxpayers are encouraged to seek expert advice and representation to navigate the dispute resolution process effectively.
Implication: Engaging experienced tax advisors and legal representatives can greatly enhance a taxpayer’s chances of a favorable outcome in a dispute.
The Nigeria Finance Act 2022 introduces a revamped tax dispute resolution mechanism aimed at expediting the resolution process and providing taxpayers with fair and transparent procedures. To navigate this system successfully, taxpayers should consider alternative dispute resolution methods, be aware of their rights, adhere to time limits, and seek expert advice when necessary. By doing so, taxpayers can navigate the evolving tax landscape in Nigeria with confidence and ensure that their rights are protected in the event of a dispute.
For professional advice on Accountancy, Transfer Pricing, Tax, Assurance, Outsourcing, online accounting support, Company Registration, and CAC matters, please contact Sunmola David & CO (Chartered Accountants & Tax Practitioners) at Lagos, Ogun state Nigeria offices, www.sunmoladavid.com . You can also reach us via WhatsApp at +2348038460036.