Combating Legal Uncertainty in the Nigerian Tax Avoidance Laws

Abstract

Nigeria utilises its oil earnings to finance over fifty percent of its budget. Therefore, the fall in oil price has negatively impacted the revenue earnings of the federal Nigerian government since the 1980s. This has led to strict enforcement of the relevant tax laws on all persons (including juristic persons), leading to rampant tax avoidance challenges in Nigeria. This article investigates the ambiguity in the relevant laws, which enabled tax avoidance by taxpayers in Nigeria. The article employs a qualitative and doctrinal methodology. In addition, it provides that the Nigerian tax authorities’ enforcement efforts are hindered by the lack of clarity and predictability of the tax laws, which is worsened by the conflicting aspects of tax incentives and the general anti-avoidance provisions in the different taxing statutes of Nigeria. The article also provides that the ambiguity in anti-avoidance provisions and certain provisions of the tax laws gives rise to uncertainty and unpredictability in tax avoidance cases in Nigeria. Thus, the article isolates the gaps and flaws in the tax laws and recommends robust measures to combat such flaws.

Keywords

• tax avoidance
• tax incentives
• uncertainty
• artificial transactions