TAX EVASION, DIVINATION AND CORPORATE INSANITY

BY

 Professor Taofeeq Abdulrazaq LL.B., Ph.D.(ABU)., LL.M.(LSE)., B.L., ACIArb., FCIB., FCTI. Professor of Taxation and FIRS Endowed Chair in Tax Law, Faculty of Law, Lagos State University

 

Introduction

In his amusing collection of essays, Essays in Satire, Father Ronald Knox included one entitled "The New Sin". This told how an announcement appeared in the Morning Post Newspaper to the effect that on a particular evening in the year, a lecture would be delivered in the Albert Hall in London entitled “The New Sin". Came the evening and naturally, the Albert Hall was packed. The vast audience awaited the arrival of the lecturer in a mood of suppressed excitement. A short, stocky middle-aged man, apparently of European origin, came on to the podium. He had endured, he explained, great torment of mind. Should he, or should he not, disclose to his audience, so obviously eager to learn, the details of the New Sin. After much heart searching, he had reached the reluctant conclusion that it would be morally indefensible to expose them to the temptations inherent in such knowledge. He would bid them good-night. He had nothing more to say.

On the contrary there are few things to say.

The thesis I profess here today is in the realm of Tax Psychonalysis. It is a simple thesis based on the following grounds:

1.That tax evasion is a crime that can be committed by individual persons and companies

2. That as a crime - insanity is available as a legitimate defence open to individual persons and companies accused of tax evasion

3.That companies can and do suffer from insanity and that using the process of divination corporate insanity like any other ailment can be predictably diagnosed

1. That tax evasion is a crime that can be committed by individual persons and companies evasion

The following discussions on the following indicate the extent of the meaning of tax -  

·         Definition of Tax Evasion.

·         Legislative meaning of tax Evasion

·         The Royal Commission on Taxation of Profit and Income (UK)1955 (Radcliffe Commission)

·         The Royal Commission on Taxation, Canada 1966

·         The Taxation Review Committee Australia 1975

·         Judicial Meaning.

Definition of Tax Evasion.

The Oxford English Dictionary defines evades as:

To get away escape or to escape by contrivance or artifice from (attach, pursuit, adverse designs), so to avoid, save oneself from a 9threatened evil or inconvenience), to elude (a blow), avoid encountering (an obstacle or, to contrive to avoid (doing something); to get out of performing (a duty), making (a payment) or, to defeat the intention of (a duty), making a (payment) or, to defeat the intention of (a law, stipulation etc) by specious compliance with its letter.

Legislative meaning of Tax Evasion

The Nigerian Tax Statutes provides no legislative definition of tax evasion but from the various offences and penalties sections, the offences stated there provide an insight into what may be regarded as tax evasion. Tax evasion may thus be perpetuated in some of the following ways:

Failure to make return for income tax or capital gains tax;

Failure to make return for corporation tax;

Incorrect return or accounts.

The various acts must be done with fraud, wilful default or neglect and knowingly for them to constitute the offence of tax evasion. This approach of stating an act which constitutes tax evasion are common to common law jurisdictions.

The Royal Commission on Taxation of Profit and Income (UK)1955 (Radcliffe Commission)

The Radcliffe Commission defined tax evasion as a situation which:

Denotes all those activities which are responsible for a person not paying the tax that the existing law charges on his income. ex hypothesis he is in the wrong though his wrong doing may range from the making of a deliberately fraudulent return to a mere failure to make a return or to pay his tax at the proper time.

This definition was also accepted by the Carter Commission in Canada.

The Taxation Review Committee Australia 1975 (Asprey Commission)

The Asprey Committee stated that:

The phrase “tax evasion” describes an act in contravention of the law whereby a person who derives a taxable income either pays no tax or pays less tax than he would otherwise be bound to pay. Tax evasion includes the failure to make a return of taxable income or the failure to disclose in a return the true amount of income derived…….

Judicial Meaning.

It is the function of the judicial branch of the government to resolve the doubt, and in performing their judicial functions the courts are called upon to determine whether in view of the facts proven and the languages employed in the statute the individuals is or is not subject to the prohibition or burden of the same.

In determining the question, what is tax evasion? Lord Hobhouse pointed out in Simms v. Registrar of Probates (1900)AC at pg 334 that:

It does not appear to their Lordship that an examination of the decisions in which the word 'evade' has been the subject of comment leads to any tangible results. Everybody agrees that the word is capable of being used in two senses, one which suggests underhand dealing, and another which means nothing more than the intentional avoidance of something disagreeable.

Tax evasion was also considered in the case of Bullen v. Wisconsin (240 U.S. 625, 630-631(1916)) by Justice Oliver Wendell Holmes where he said:

We do not speak of evasion, because, when the law draws a line, the case is on one side of it, or the other, and if on the safe side, it is more the worse legally that a party has availed himself to the full of what the law permits. When an act is condemned as an evasion, what is meant is that it is on the wrong side of the line indicated by the policy if not by the mere letter of the law.

These decisions have added little to the legislative meaning and in essence have adopted them. The meaning of tax evasion is therefore dependent upon a descriptive definition setting out the acts that constitutes evasion in contrast to tax avoidance. This view was endorsed by the Supreme Court of Nigeria in Akinsete Syndicate v. Senior Inspector of Income Tax (FSC 164/163, 30/10/64) where Bairamian, J.S.C. stated that: “ A person may use lawful means to avoid income tax.What he may not do is to try to evade it. What he does should be genuine not merely a veil to hide or dissemble the reality of things” .

The cases quoted above show that the basic ingredient in tax evasion is mens rea and absence of any credible explanation for fraud, wilful default or neglect. As was correctly stated by Williams J. in Barripp v. Commissioner of Taxation (N.S.W.)(1941) 2 AITR

It is sufficient for the purpose of the appeal to say that where a tax payer makes a profit which he knows to be taxable income and wilfully omits this profit from his income tax return, he would be guilty of evasion in the absence of some satisfactory explanation for the omission.

It now appears that the definition of tax evasion is dependent upon the presence of two elements in the acts prohibited by the tax statutes. These two elements are the act itself (false statement or evasion of tax – actus reus) and the guilty intent of the accused (mens rea). A lengthy list of cases of cases confirms this conclusion and the bulk of jurisprudence currently being elaborated in the area of tax evasion addresses itself to determine whether the relevant fact demonstrate these two elements. It is therefore necessary for the prosecution to prove that the evader knowingly made a false or deceptive statement in his return of income or that he wilfully (with guilty intent) evaded or attempted to evade payment of taxes.

Problem of Tax Evasion

“The difference between tax evasion and avoidance is the thickness of the prison wall”

Method of Tax Evasion

·         Failure to furnish a return, statement or information or to keep records required

·         Making an incorrect return by omitting or understating any income liable to tax.

·         Giving any incorrect information in relation to any matter or thing affecting the liability to tax of any taxable person.

·         Refusing or neglecting to pay tax.

Extent of Tax Evasion

Indirect Measures of Non Compliance

Indirect Approaches to Measuring Non Compliance (Japan)

Reasons for Tax Evasion

•Age

•Gender

•Fairness of the tax system

•Considerations Concerning the Level of Taxation And the Worth of Public Expenditure.

•Tax Equity Considerations.

•Perceived Consequences of Evasion

•Opportunity

•Moral Perceptions.

•Economic Considerations

The proposed legal solution we advocate is the possibility of granting a "tax amnesty" in Nigeria.

Tax Amnesty

An "amnesty" in the case of income tax may be given consideration in the context of an anti evasion drive in Nigeria where evasion has hitherto been widespread. The government wishes to tackle evasion in earnest but also to give evaders an opportunity, in the transition from a lower to a higher tax morality, to square accounts with the tax authorities by disclosing items previously omitted and settling their true liability. The terms may be:-

1. That the evader is granted freedom from prosecution but must pay the tax and full monetary penalties; or

2. That there is both freedom from prosecution and an abatement of or exemption from monetary penalties, or

3. That tax is computed at a compounded. rate on hitherto concealed capital when disclosure is made, the rate being intended to cover both tax and penalty.

It is difficult to justify an amnesty in terms of equity and the main justification is that it would give impetus to an anti-evasion drive, producing a useful flow of additional revenue at low administrative cost, and it would assist in producing a higher tax morality among the general public at a faster rate than could otherwise be expected.

An amnesty may be appropriate in the following circumstances:

1. Tax evasion has been very widespread and there is no danger of tax payers as a whole opposing the offer of an amnesty.

2. There is an imminent change of government or the re-election of a government with a new mandate and now or then there would no doubt be a determination to grapple evasion couple with a wish to show mercy to a "repentant" evader.

3. Amnesties are a custom of the country and it would be nomalous to refrain from extending an amnesty to tax evaders when those guilty of worse crimes benefit from the periodical exercise of mercy.

Because anti-evasion work is an expensive part of income tax administration, a short-cut such as voluntary disclosure by an evader under an amnesty is both labour and money saving and therefore there are sound economic reason for paying a price to secure such disclosure and the corresponding administrative economies.

The following are the basic ingredients for a successful amnesty

a) The evader must feel in imminent danger of discovery if he does not come forward. To arouse fear of discovery i the mind of the evader it is essential to mount an anti-evasion drive before announcing an amnesty.

b) The evader must be satisfied that he will receive confidential treatment and that his disclosures will not make him a "marked" man for future harassment. Some pains must be taken to ensure that an evader who wishes to make disclosures should be able to do so under conditions of secrecy.

c) The terms offered must be a comparative "bargain" so that there is a financial inducement to come forward rather than lie low and gamble on escaping detection.

d) The offer should be open for a definite and limited period, long enough for publicity about the amnesty to reach all evaders but short enough for there to be a certain amount of urgency about making a decision.

e) The amnesty should be a once-for-all offer and there should be no suggestion that it might be repeated at a future date.

f) The picture should not be that of an administration which, having tried everything else without success, is now hoping to "bribe" the evaders who it cannot trace to come forward of their own volition, but rather of a merciful but determined government giving evaders a last chance to square accounts.

It should be noted that even if all the above condition are present, success cannot necessarily be guaranteed. Tax amnesty has never been granted in Nigeria, although proposals for its usage are not unique as example from countries where it has been applied will show. These examples indicate that good results are obtainable where the conditions are right.

Tax evasion as a crime in Nigeria.

The fact of tax evasion as a crime in Nigeria is established by the nature of penalties in various parts of Income Tax Acts headed as Offences and Penalties are criminal penalties.

·         Administrative Penalties

·         Civil Penalties

·         Criminal Penalties

·         Tax Avoision

There is therefore the requirement for mens rea and actus reus for the establishment of a crime. More importantly, can a company have some blame worthy mental condition, whether constituted by intention or knowledge or otherwise, the absence of which on any particular occasion negates the punishment of crime. In other words, the act becomes criminal when the actor does it with a guilty mind.

The old common law rule was that corporate criminal liability was impossible. The reasons for this were several. In the Tin Mines case, Berkeley J. gave one-"There was no one who could be brought before the court and if necessary placed in the dock." More serious was the objection that a corporation could not be said to have a mind capable of being guilty, and therefore could not be convicted of any offence requiring any type of mens rea.

Corporate Criminal Liability

And there was the further point that it was not easy to find a suitable punishment for a corporation. But this old view broke down with the increasing proliferation of corporations. At first, corporations were held vicarious liable for offences committed by their servants. But, subsequently, by a fictional process, the states of mind of the agents of the corporation were held to be attributable to the corporation, so that the corporation itself could be said to have committed the offences with the requisite mental element. And effective means of punishment lay to hand in the fine. So much has the common law attitude changed that in one of the leading English cases, R. v. I.C.R. Haulage,(1944 K.B. 551.) the suggestion was made that a corporation should be liable for an offence involving violence committed by one of its servants and in Moore v. Bresler,(1944 2 AII E.R. 515.) a company was convicted in respect of the fraudulent act of Its agent, even though he intended to defraud the company.

There is no special legal reason why in principle a corporation should not be convicted under the Criminal Code. Practically every offence in the Code begins with the words "Any person who .... " The meaning of "person" as defined in section 3 of the old Interpretation Act included ‘any company or association or body of persons corporate or unincorporate." This definition was however subject to an important qualification of uncertain extent. For in the definition of ".definition" any term in section 3 should apply "unless there is anything in the subject or context repugnant to such meaning. This point was taken In R. v. Opara(1943 9 W.A.C.A. 70) where it was held that the subject-matter of section 100 of the Criminal Code (an offence described as "public officers receiving property to show favour") was such that It was repugnant to define "person" so as to include corporations. In extensive obiter dicta the court also thought the same rule to apply to all the other offences in Chapter XII (relating to corruption), and also to section 319 (providing the punishment for murder) and section 390 (providing the punishment for stealing).

This list was not intended to be exhaustive, and it seems that the court took the view that many offences cannot be committed by a corporation. The definition of "person" in the Interpretation Act (1964), section 18 (1), is the same as in the previous Act. The repugnancy provision has gone, but the courts will have to apply a similar rule.

The argument that mens rea cannot be attributed to a corporation was specifically rejected in A.G. (Eastern Region) v. Amalgamated Press: In that case, a corporation was charged under section 14 (1) of the Eastern Region Newspaper Law (1955) which provides that, "Any person who publishes or reproduces, or circulates in a news­paper any statement, rumour or report knowing or having reason to believe that such statement, rumour or report is false, shall be guilty of an offence." In convicting the accused company, Ainley C.J. said:

"I make no doubt that a corporation can have knowledge of the falsity or otherwise of that which is published in a newspaper, and a corporation, through its agents, is clearly capable of publishing newspapers. I cannot see, therefore, why a corporation is incapable of publishing in a newspaper that which the corporation knows, or has reason to know is false."

The same line of reasoning could no doubt be applied in arguing that a corporation has a "will" for the purposes of section 24 of the Criminal Code. Since a corporation has no physical existence this will must be found in some human agent. However the will of every servant or agent of the company cannot be regarded as the company's will. As Denning L.J. has observed:

"A company may in many ways be likened to a human body. It has a brain and a nerve centre which controls what it does. It also has hands which hold the tools and act in accordance with directions from the centre. Some of the people in the company are mere servants and agents who are nothing more than hands to do the work and cannot be said to represent the mind or will.Others are directors and managers who represent the directing mind and will of the company and control what it does. The state of mind of these managers is the state of mind of the company and is treated by the law as such.”

Clearly then some officials of the company are identified with the company or are the company and not merely agents of it. It is sometimes difficult to decide which officials can be so regarded. But once the facts are ascertained it is a question of law whether an official can be regarded as the company or merely its servant or agent. In Tesco Supermarkets Ltd. v. Nattrass (1972 A.C. 153;(1971) 2 AII E.R. 127.) the House of Lords held that that acts of a store manager employed by the defendant company which operated a chain of supermarkets was not the act of the company itself.

Each offence will have to be considered on its merits when deciding whether It would be repugnant to its subject or context to convict a corporation. But it seems that the major difficulty involved in such convictions is the physical impossibility of imposing certain punishments on corporations. The punishment for murder, for instance is fixed by law as death, and a corporation cannot be hanged. In A. G. (Eastern Region) v. Amalgamated Press Ainley C.J. declared that a corporation cannot be charged with an offence the only punishment for which is imprisonment. But in fact very few punishments’ are fixed by law and the courts can usually impose a fine. In R. v. Service Press Ltd.(1952) 20 N.L.R. 96.) de Comarmond S.P.J. said: "The contemnor being a limited company I cannot have recourse to imprisonment which, I consider , would have been a salutary lesson"; but he went on to Impose a fine.

Further than this it may be said that the limits of corporate liability under Nigerian law await clear definition

A test for determining the degree of mental disorder requisite

(1) That everyone is presumed sane until the contrary is proved.

(2) That it is a defence for the accused to show that he was labouring under such a defect of reason, due to disease of the mind as either

(a) Not to know the nature and quality of his act, or

(b) If he did know this, not to know that he was doing wrong.

(3) That if a man commits a criminal act under an insane delusion, he is under the same degree of responsibility as he would have been on the facts as he imagined them to be.

That as a crime-insanity is available as a legitimate defence open to individual persons and companies accused of tax evasion

The M'Naghten Rules were formulated in the belief that responsibility is the essence of the criminal law and that capacity to choose between right and wrong is the essence of responsibility. Over the years, with the growth -of medical knowledge the Rules became the object of increasing criticism, especially from psychiatrists who pointed out that there were many mentally ill people who, though able to appreciate intellectually that an action might be wrong, nevertheless were under intolerable emotional pressure to commit it (e.g. paranoia). To describe such people as responsible was a fiction of an undesirable kind. In England, by 1953, the Royal Commission on Capital Punishment was able to declare the M'Naghten test of responsibility' as "so defective that the law on the subject ought to be changed," and the recommendation was made to enlarge the Rules by adding an exemption from responsibility In the case of one who was, by reason of his mental disease or deficiency, incapable of preventing himself from committing an unlawful act.

In the event, the British Parliament did not alter the M'Naghten Rules, but provided, though only with respect to murder cases, that if a person were to kill another while suffering from such abnormality of mind as substantially impaired his mental responsibility for his act he should be guilty only of manslaughter,

In the United States the M'Naghten Rules have been applied in many States. But in one jurisdiction, the District of Columbia, criticism of them was carried much further than was the case in England. From the 1870s, rules of a kind more favourable to the psychiatric view were gradually evolved, culminating in 1954 in the leading case of Durham v. U.S.,(See Donnelly et al., op. cit. pp. 741-749.) in which the test was stated to be:” "simply that an accused is not criminally responsible if his unlawful act was the product of mental disease or mental defect.

In Nigeria the defence must establish the legal meaning of insanity and responsibility for it

(1) That at the time of committing the crime, the accused was in a state either of mental disease or of natural mental infirmity.

(2) It must then be shown that the disease or infirmity was such as to have deprived him, either

(a) Of his capacity to understand what he was doing or

(b) Of his capacity to know that he ought not to 'do the act or make the omission; or

(c) Of his capacity to control his actions.

Criminal Insanity Defence

In arriving at its conclusion, the court may take into account evidence of insanity in the accused’s ancestors or blood relations." It will also examine his own acts previous to or contemporaneous with the crime. Thus, in R. v. Inyang (1946 12 W.A.C.A 5.) insanity was inferred from the fact that witnesses had known the accused to suffer severe headaches, to wander about at night, to speak in a meaningless manner, to laugh "insanely," to throw his food away, and to go to school with a shoe and sock on one foot only-coupled with evidence that his mother had similar headaches, that his father had no proper control over his mental powers, and that in prison he urinated into his food. Those facts may be contrasted with Dim v. R(1952 14.W.A.C.A 154.) where the accused's moroseness and seeming abnormality was attributable not to a disease of the mind, but merely to an illness causing physical pain. In establishing insanity, medical evidence is of course desirable, but it is not essential.

Following the English case of R. v. True (1922 16 Cr. App. R.164 at 167) it has been held that a Court of Appeal will be reluctant to disturb the trial judge's finding of fact that the accused was sane.

That companies and do suffer from insanity and that using the process of divination corporate insanity like any other ailment can be predictably diagnosed

Signs of Insanity

Asker identifies about seven but I picked 3 of it that are common.

1.You have meaningful conversation with your blender

2. You start each morning with a 30minutes jog in a public toilet.

3. You put tennis balls into the microwave to see if they would hatch like an egg.

On a more serious note 10 symptoms are identified

1.Previous history of mental illness

2.Previous history of alcohol or drug abuse

3.Aggression

4.Emotional liability

5.Increased energy

6.Elevated mood

7.Suspicious mood

8.Thoughts of conspiracy

9.Hallucination

10.Delusions

Corporate Insanity

This can occur in the following 3 instances

1.Organic Theory/ Person like Entities

2.Alter Ego

3.Superior Orders from Person Like Centers of Consciousness

Predicting Insanity through Divination

Divination is the art of technique of gaining knowledge of future events by means of observing and interpreting signs. Various objects or events may serve as the media of divination.

In other words it is simply an alternative method of medical diagnostics. The following discussion is purely an academic exercise and therefore pass no moral or religious judgment on its use.

 

Islamic Divination (Istiarah)

This is the method of seeking guidance from God by the means of the Quran. There is a divided opinion on its permissibility. Some persons argued that is not permissible because through it the diviner seeks to gain knowledge of future events, which is ability reserved for God.

Christianity and Divination

Divination is a major problem in Christianity. It is the practice of using normal and explainable objects, phenomena circumstance and occurrences to understand and interpret the will of God. Some Christians consider it as a method of determining God’s will in life. A kind of direction from the Holy Spirit. Some more fundamental Christians consider it a paganist practice.

Traditional Divination(Ifa)

The use of this was made more vivid in The Gods Are Not to Blame by Ola Rotimi in the use of Baba Fakunle as a spiritual guide. What kind of person and how do the people react to him? ? He is modelled on Sophocles' Blind Thebian Prophet Teiresias, and in the Yoruba context in which he operates, he is a 'diviner' in the traditional sense. One of the stage-directions tells us that when the baby Odewale is brought before the Old Seer, Fakunle 'begins to cast his opele, stringed objects of divination’. There is initially confidence in his powers of divination and his acute perception. He is, Baba Fakunle, oldest and most knowing of all Ifa priests in this world. These words are spoken in humble deference to the Prophet Omniscience and age. The people's dependence on his skills is in no doubt.

His social status is indisputably acceptable to all. There is a sense of tense expectancy as the people wait for the Seer to pronounce the royal baby's future:

“Mother waits, Father waits, Now, tell them: what is it that the child has brought as duty to this earth from the gods”.

The praise-song to the Prophet is also expressive:

Baba Fakunle, oldest and most honoured of all Seers, in this world.

Baba Fakunle, blind but all-knowing: head downwards like a bat, and like a bat fully aware of the way the birds fly;

Baba Fakunle even without eyes you are all-seeing - a partridge: you see with the face you see with the whole body •••

Baba Fakunle, if you had eyes what would you see?

Ask us who have eyes yet see nothing.

To the First Chief the Prophet is Aged keeper of all secrets known only to the god who is your master you the watchman

Baba Fakunle, it is you we greet

What is Ifa?

The traditional view is the theological view but it also promotes a popular interpretation of meaning of Ifa derived from analysis of words. It is pertinent here to note the alternative names for Ifa such as Orunmila, Ela, Agbonmiregun, Edu, Bara-Petu, Obarixa, Ara Ado, Ara Owo, AraIbini, Baba-L’exin-Oye, Opitan, Olufe. Lucas' inclusion olodumare as an alternative name for Ifa is patently incorrect. No Babalawo (Ifa priest) would call Ifa by the Omnipotent’s name, Olodumare.Of the names, for Ifa listed above some are easily explained and require no convoluted etymology: Ela means 'Saviour' or 'Redeemer'; Edu means 'The Black one' in reference to Ifa's symbol, the black palm-nuts; Bara-Petu means 'Lord of Ipetu', a city reputed to have been founded by Ifa. Obarixa is 'King among divinities'. Ara Ado, Ara-Owo, Ara-Ibini refer to Orunmila's sojourn in cities of these names; Baba-L'exin-oye means Grand-knight of the city of Oye (in Ekiti-land) a term of royalty; Opitan Olufe means 'Historian of, or from, Ife City

Ifa Technique

In Ifa divination, the operative configuration is generated either by the use of 1 divining chain (Opele) or by the casting of special palm-nuts called Ikin. Ifa Technique - by [kin (Palm Nuts) Chief Adeboye Oyesanya, Chief priest of Ijo Orunmila Ato, has observed that Ikin cannot be used alone; rather, he writes:

"it is always used in conjunction with Opon (Divining Tray) Iyerosun (Divining Powder) and Ajere (Container for the Palm-nuts).

"Some Iyerosun is sprinkled on the Opon and spread over the whole area of the Opon. Sixteen of the /kin (selective) are usually used for the purpose of consultation. The 16 Ikin are placed in the palm of the left hand of the caster. The caster (i.e. diviner) tries to collect all the palm-nuts for the right hand at the same time. If two IKIN remain in the palm of the left hand one mark is imprinted on the Iyerosun on the OPON and the first imprinting is done on the top of the right column A as in the diagram below. The casting process is repeated and the result imprinted on the top of the left column marked B. Casting is repeated and marked alternately to a total of eight casts until the final configuration is obtained."

Insanity as a Defence to Tax Evasion

Fulani Theory of Precedents.

No one should recommend a medication or form of behavior unless the person who is recommending it has had a similar experience in the usage of the medication or in the nature of the attitude.

See the case of Federal Board of Inland Revenue Vs. M.A.B (I NTC 357)

 

FEDERAL BOARD OF INLAND REVENUE PLAINTIFF

V

MAB - DEFENDANT

FEDERAL REVENUE COURT, LAGOS (A.A. ADEDIRAN, J.) AUGUST 12TH 1974

Personal Income Tax - Failure To Fill Income Tax Forms - Defence Of Mental Illness In Income Tax Cases.

The plaintiff was claiming from the defendant a sum of N 1,606 being the arrears of income tax and penalties for 1%6/67 and 1967/68 years of assessment.

Evidence adduced at the trial indicated that income tax forms for the two years were served on the defendant either personally or by registered post, and the defendant failed to fill the forms or declare his annual income. The plaintiff then proceeded to raise assessment notices and demand notes for income tax and penalties for the two years. The assessment notices and demand notes were either sent personally or by registered post. Where they were sent personally, the defendant or his daughter issued receipts to show that the documents were received by them. There was also no evidence that the notices sent by registered post were returned unclaimed. It was contended on behalf of the defendant that he had been mentally sick for the past twenty years and that he could not have received any of the notices as alleged by the plaintiff. His brother, who was appointed the receiver of his estate, defended this action. It was held even though the defendant might have been mentally ill for the past twenty years, the documents were served on him when he had his lucid periods. The defendant was therefore liable to pay the assessed taxes.

 

Conclusion

The following can be said to be established in Nigeria -

1. Tax Evasion is a Crime

2.A company can commit the crime of tax evasion

3.Insanity is predictable through the process of spiritual diagnosis

4. A company can plead the defence of insanity to tax evasion.

 

 

 

 

References

1)M .T. Abdulrazaq (1993) Nigeria Tax Offences and Penalties.

2)Okonkwo & Naish (2000) Criminal Law in Nigeria.

3)Abosede Emmanuel (2000) Ifa Festival.

4)Tiley & Collision (2010) UK Tax Guide.

5)Aderemi Sulu (1992) Nigerian Tax Cases.