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Delta Assembly Speaker, Rt. Hon. Sheriff Oborevwori at the first Post Covid Sitting of the House

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Delta Assembly Passes Controversial ‘Tax Bill’


… Similar Sections of Bill are Subject of Litigations – Lawyer Cries Out

By Iteveh Ekpokpobe

The Delta State Assembly has passed the controversial ‘Delta State Internal Revenue Bill, 2020’ into law without consideration of calls by stakeholders for public input.

The bill which passed third reading during today’s plenary was introduced by the State Governor, Senator Ifeanyi Okowa, on Thursday 30, April, through a letter, and passed first and second reading on Last week’s Tuesday and Wednesday respectively.

However, the bill was committed to the Special Committee on Bills and Public Accounts Committee by the Speaker, Rt. Hon. Sheriff Oborevwori, with directive to submit their report next week Tuesday 12, May, 2020.

Following outcry by citizens and civil society organisations, the house deferred report on the bill till today plenary, where the Committee report was hurriedly presented and passed.

The Speaker, Mr Sheriff Oborevwori who spoke on the  passage of the Delta State Internal Revenue Service Bill, described it as a right step in the right direction for the economy of the state adding that there was no better time to move away from over dependence on oil and Federal allocation than now.

“This Bill will undoubtedly enhance the administration and collection of the different taxes, tariffs, rates, fees and charges in the state. This will in turn boost the economy of our dear state”, he said.

However, opinions on the bill have not changed.

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A lawyer, A.P Obarogbi, recommended that the law-making arm in Delta State should have straightened some grey areas before passing especially as it relates to the enforcement of power to distrain.

She disclosed that  SECTION 37(1-3) of the Bill, which is similar to SECTION 31 of the Federal Inland Revenue Service, has been a subject of litigation.

According to her, the significant issue in the bill as passed, is the procedure for enforcement of power to distrain. “Ss. 37(1) of the DSIRS  proposed bill may violate the right to fair hearing and right to privacy as enshrined in the 1999 Constitution of the Federal Republic of Nigeria(as amended).”

“For instance there have been cases where the “Service” i.e. FIRS, has evolved the practice of directing banks to restrict taxpayers’ accounts on the ground that such taxpayers have outstanding tax liabilities to settle. In response to such directives, the banks, usually, do not investigate or question the legality of these directives of the FIRS before acting pursuant thereto. The banks simply proceed to restrict the taxpayers’  bank accounts  until the alleged outstanding tax liabilities have been resolved between the taxpayers and the FIRS. See the case of AMA ETUWEWE v FIRS & GTB Plc. (Suit No. FHC/WR/CS/17/2019). It was held in this case that freezing of the plaintiff’s bank account without recourse to him violated his right to fair hearing and was negligently done in breach of the bank’s fiduciary duty to the plaintiff, and therefore was illegal without the backing of an order of court(emphasis are mine).

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Also, in the case of FIDELITY BANK PLC v BAJUYA VENTURES LIMITED & ANOR(2012) All FWLR[PART 646] C.A 456; 2011/CA(12)LEDLR-1, the Court of Appeal held that banks have no right to freeze their customers account without a proper order of court. Where a bank proceeds to freeze the account of a customer without an order of court, the customer can rightly institute a claim in a competent court not just to unfreeze the account but to have damages awarded in his favour for the wrongful action of the bank.”

“SECTION 41(1-3) of the Bill – “A LAW TO ESTABLISH THE DELTA STATE INTERNAL REVENUE SERVICE AND ITS BOARD, 2020 AND OTHER MATERS CONNECTED THEREWITH” provides thus: Without prejudice to any other power conferred on the Service for the enforcement of payment of any revenue from any collecting agents, where the payment has become due, and a demand notice has, in accordance with the provisions of the relevant Law, been served on a chargeable person or on his agent, if payment is not made within the time limited by the demand notice, the Service, may for the purpose of enforcing payment of the amount due, distrain: upon the goods, chattels or other properties, (movable or immovable) of the person liable to pay the due tax outstanding; and upon all machineries, plants, tools, vehicles, animals and effects, in the possession or use, or found on the premises or land of the person.

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The authority to distrain under this section shall be in such form as the Service may direct, and that authority shall be sufficient warrant and authority to levy by distrain the amount of revenue due. For the purpose of levying any distrain under this section, an officer duly authorized by the Chairman “may” apply under oath to a Judge or the Revenue Court sitting in Chambers for the issue of a warrant under this section. (Emphasis mine).”

In the same vein, she stressed that in Section 41 Subsection 3 of the bill, the word “may” gives a duly authorized officer a sort of discretionary power which can be abused when enforcing the Power to distrain. “

It is rather expedient and equitable to replace the term “may” with “shall”. The rationale is that, this will impose a duty on the authorized officer to follow proper procedure when levying distrain. There have been cases where procedures were not followed in the enforcement of the power to distrain which resulted to breach of human rights and the court found in favor of the aggrieved party or parties. See AMA ETUWEWE v FIRS & GTB and FIDELITY BANK PLC v BAJUYA VENTURES LIMITED & ANOR.(supra).” She stressed.


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