NECA Secures Landmark Judgement Against Nigeria Customs Over Additional Tax, As Court Strikes Out Case For Lack of Merit

The Nigeria Employers’ Consultative Association (NECA) has secured a favourable judgement for its members against the Federal Government on the proposed plan to impose additional tax burdens on businesses.

In a suit filed in 2022, following a circular from the Federal Government, which proposed to impose additional tax burdens on businesses through the introduction of excise duty on non-alcoholic, carbonated and sweetened beverages, NECA had requested the court to dismiss the case on the ground that the circular was invalid and unjustifiable.

Other defendants joined in the suit include Honourable Minister of Finance, and the Honourable Minister of Budget and National Planning.

After three years of legal fireworks, Justice O.A Egwuatu of the Federal High Court, Abuja dismissed the 2nd Defendant’s Preliminary Objection for lack of merit.

Delivering judgment on the substantive case, the court held in summary that the circular issued by the 2nd Defendant (Federal Ministry of Finance) is invalid and ultra-vires stating that the powers of the 2nd Defendant; and the 1st Defendant (the Customs Service) is not entitled to demand transport and feeding allowances from the plaintiffs (NECA members).

The court further declared that the circular entitled “Approval for the Implementation of 2022 Fiscal Policy Measures and Tariff Amendments,” dated March 1, 2022 issued by the 2nd Defendant (Honourable Minister of Finance, Budget and National Planning) is invalid and ultra-vires the powers of the 2nd Defendant

In his reaction shortly after the verdict, the Director General, NECA, Adewale Smatt-Oyerinde, described the judgment as another victory for organised businesses against official arbitrariness and unfortunate attempts to impose additional burdens on businesses.