The Federal Inland Revenue Service (FIRS) via its letter referenced FIRS/EC/MISC/5435/18/57, dated April 23, 2018 directed that only Chartered Institute of Taxation of Nigeria (CITN)’s stamp and seal for the purpose of filing tax returns on behalf of taxpayers with FIRS shall be recognized by FIRS with effect from January 2, 2019.
However, an exception to the aforesaid directive was introduced by FIRS to wit; that taxpayers who decide to file their tax returns directly without the need of the service of Tax Practitioners will be exempted from the usage of the CITN’s stamp and Seal. Such category of taxpayers are therefore not under the obligation to comply with affixing of CITN stamp and seal on their tax returns filed with FIRS.
Consequent on the above said directive, five members of the Institute of Chartered Accountants of Nigeria (ICAN) instituted a suit (IGBAROOLA V. FIRS & 4 ORS) at the Federal High Court sitting in Lagos by way of originating summons challenging the authority of FIRS in recognising the power of CITN to regulate the tax profession in Nigeria in all its ramifications. Their argument was based on Regulation 5 of the Tax Administration (Self-Assessment) Regulations, 2011, which purports to allow members of ICAN, The Association of National Accountants of Nigeria (ANAN), and CITN to co-jointly file tax returns on behalf of taxpayers.
In a judgment delivered by the Court, on Tuesday, May 21, 2019, it was held that only members of the CITN can practice taxation in Nigeria pursuant to the relevant provisions of the CITN Act. The court also held that Regulation 5 of the Tax Administration (Self-Assessment) Regulations, 2011, which purports to allow members of ICAN, ANAN, and CITN to co-jointly file tax returns on behalf of taxpayers, where taxpayers opt to hire tax agents for reward (relied on by the plaintiffs) was in conflict with the extant provisions of the CITN Act.
The implication of the above is that any professional (lawyers, accountants, etc.) who intends to act as a Tax Practitioner must be registered with the Chartered Institute Of Taxation of Nigeria as a member, and subsequently apply for the CITN stamp and seal which is mandatory to be affixed on all tax returns to be filed on behalf of their clients (taxpayers who do not want to file their tax returns directly with FIRS). Failure of this will result in such tax returns without the required CITN stamp and seal being rejected for filing by FIRS.