ASPECTS OF TAX CRIMINALITY IN NIGERIA
M.T.Abdulrazaq LLB(ABU) LL.M(LSE)
PhD (ABU) BL ACIArb FCIB FCTI.
Professor of Taxation, Faculty of Law, Lagos State University .
Introduction
This
article is concerned with the tax practitioner's own position when his client or employer has
become, or seems likely to become, involved with the
criminal law. The tax practitioner in those circumstance needs to be alive to the
possibility of himself infringing the provisions of the criminal law. This is an aspect which has so far received little attention.
It
must be clear, however, that this article makes no claim
to being an exhaustive guide but one that simply draws attention to some areas of the criminal law of which the
tax practitioner may be unaware or has
forgotten. Expert legal advice should be
sought whenever a tax practitioner is in doubt about his own position.
1. Cheating
a.Section.321 of The Penal Code Law, 1959
(Northern Region No. 18 of 1959)
(See generally Notes on
the Penal Code Law (1959) S. S. Richardson, Government Printer, Kaduna).
The
above section provides that whoever by deceiving any person
a.fraudulently or dishonestly induces the person so deceived
to deliver any property to any person or to consent that any person shall retain any property; or
b.intentionally induces the person so
deceived to do or omit to do anything which he would not do or omit to do if he
were not so deceived and which act or commission causes or is likely to cause
damage or harm to that person in body,
mind, reputation or property, is said to cheat.
A
dishonest concealment of facts is a deception within the meaning of this
section and is akin to the U.K offence of cheating the public revenue. See also
Hudson (1956) 2QB
252. This also inevitably leads to the offence of tax evasion.
252. This also inevitably leads to the offence of tax evasion.
Comment
(i)The
definition of the offence of cheating embraces some cases in which no transfer
of property is caused
as a result of the deception and some in which a transfer does occur; for these cases generally, provision is made in section 324. For the cases in which property is transferred, a more specific provision is made in section 326.
as a result of the deception and some in which a transfer does occur; for these cases generally, provision is made in section 324. For the cases in which property is transferred, a more specific provision is made in section 326.
(ii)The
original authors of the Penal Code said:
‘’ propose to make it cheating to obtain property by deception in all cases where property is fraudulently obtained".
‘’ propose to make it cheating to obtain property by deception in all cases where property is fraudulently obtained".
In
the definition of cheating in section 320 there are set forth two separate
classes of acts which the person deceive may be induced to do. In the first place he
may be induced to deliver any property to any person or to consent that any
person shall retain any property. In order
to constitute the offence of cheating, the person who induces another to do
this class of act must do so fraudulently or dishonestly.
The second class of acts set forth in the section is the doing or omitting to do anything which the person deceived would not do or omit to do if he were not so deceived. In order to constitute the offence of cheating with regard to this class of acts, the person who induces another to do them must intentionally induce him to do them. In the first class of acts, the inducement must be fraudulent or dishonest. In the second class of acts, the inducement must be intentional.
The second class of acts set forth in the section is the doing or omitting to do anything which the person deceived would not do or omit to do if he were not so deceived. In order to constitute the offence of cheating with regard to this class of acts, the person who induces another to do them must intentionally induce him to do them. In the first class of acts, the inducement must be fraudulent or dishonest. In the second class of acts, the inducement must be intentional.
(iii). The distinction between
breach of contract and cheating depends upon the intention of the accused at
the time of the alleged inducement which may be judged by his subsequent act
but of which the subsequent act is not the sole criterion. Mere breach
of contract does not normally give rise to a criminal prosecution, but see section 381 for an exceptional case.
of contract does not normally give rise to a criminal prosecution, but see section 381 for an exceptional case.
(iv).
The offence of cheating must be committed by the wrongful obtaining of a
consent. The difference between
this offence and that of extortion is that in extortion the consent is obtained
by intimidation and in cheating the consent is obtained by deception.
(v)
Cheating is a complete offence by itself and is not a form of criminal breach
of trust. A person who tricks
another into delivering property to him bears no resemblance to a trustee in
the ordinary accepted meaning of that term.
2.
Incitement to Commit a Criminal Offence
It has been said that an inciter is one:
‘Who reaches and seeks to influence the mind of another to the
commission of a crime... The approach to the others mind may take various
forms) such as suggestion) proposal) request) exhortation) gesture) argument) persuasion) inducement) goading or the arousal of cupidity’
forms) such as suggestion) proposal) request) exhortation) gesture) argument) persuasion) inducement) goading or the arousal of cupidity’
(Homes
J. A. in Nkosiyana, 1966 (4) SA 655 at 658 AD). Smith and Hogan's Criminal Law (7th edition at page 268)
says as to the mental element:
says as to the mental element:
‘
it must be proved that (the accused) knew of (or deliberately closed his
eyes to) all ',the circumstances of the act incited which are elements of the
crime in question)).
Where
incitement is tried on indictment, 'it
is punishable with fine and/ or imprisonment at the discretion of the court. if however:
"It is tried summarily, the offender is not liable to any
greater penalty than he would
be liable to on summary conviction of the completed offence))
(Smith
and Hogan 7th ed. at pg. 267).
3.
Conspiracy
(a)
Section. 96 of The Penal Code Law (Northern Region No. 18 of 1959) provides that:
1.
when two or more persons agree to do or cause to be done
(a) an illegal act; or
(b) an act which is not illegal by illegal means, such an agreement is called a criminal
conspiracy.
some act besides the agreement is done by one or more parties to such agreement in pursuance thereof.
Explanation
it
is
immaterial
whether the illegal act is the ultimate
object of such agreement, or is merely incidental to that object.
This section shall not apply to an agreement of two or more persons to do or cause to be done any act in contemplation or furtherance of a trade dispute if such act committed by one person would not be punishable as an offence. Nothing in this section shall exempt from punishment any person guilty of a conspiracy for which a punishment is provided by any Ordinance or other Law.
This section shall not apply to an agreement of two or more persons to do or cause to be done any act in contemplation or furtherance of a trade dispute if such act committed by one person would not be punishable as an offence. Nothing in this section shall exempt from punishment any person guilty of a conspiracy for which a punishment is provided by any Ordinance or other Law.
1. Comment
1.Conspiracy is distinguished from other offences in that
the crime consist simply in the agreement or confederacy to do some act, no matter whether it is done or not. In other offences, the intention to do a
criminal act is not a crime of itself until something is done amounting to the doing or attempting to do some act to
carry out the intention. Section 96 codifies English Law in
this matter.
2.Where, a conspiracy amounts to an abetment within the definition in
section 83, there is no need to proceed under section 96 as conspiracy of that
type is specifically provided for in section 83.
3.A mere agreement between 'two or more persons to commit an illegal act or .lawful
act by unlawful means is sufficient to constitute the offence.
4.
Explanation above is designed to save the activities of trade
unions and associations. Within the background of a trade, it is lawful for two or more persons to do an
act in contemplation or furtherance of the dispute provided that such an act is lawful if committed by one person.
act in contemplation or furtherance of the dispute provided that such an act is lawful if committed by one person.
(b) Section 516 of Criminal Code Act Cap. 77 of Laws
of Federation of Nigeria
of Federation of Nigeria
Provides
that any person who conspires with another to commit any felony, or to do any
act in any part of the world which if done in Nigeria would be a felony, and which is an offence under the laws in force in the place where it is
proposed to be done-is
guilty of a felony, and is liable, if no other punishment is provided, to
imprisonment for seven years, or, if the greatest punishment to which a person
convicted of the felony in question is liable is less than imprisonment for
seven years, then to such lesser punishment.
(c)
Section 516A of same act further state that any person who while in a State
conspires with another to do any act not in the State which if done in the state
would be a felony against the law of the State and which is an offence against the law of
the place where it is proposed to be done, is guilty of a felony and is liable,
if no other punishment is provided, to imprisonment for seven years, or if the
greatest
punishment to which a person convicted of the felony in question is liable is less than imprisonment for seven years, then to such lesser punishment.
punishment to which a person convicted of the felony in question is liable is less than imprisonment for seven years, then to such lesser punishment.
In this section and
section 517A, "law of a state" has the meaning assigned to it in section 10A of this code.
(d)
Section 517 of the same act also provides that any person who 'conspires with another
to commit any offence which is not a felony, or to do any act in any part of
the world, which if done in Nigeria would be an offence but not a felony, and
which is an offence
under the laws in force in the place where it is proposed to be done, is guilty of a misdemeanor and is liable to imprisonment for two years. The offender cannot be arrested without warrant.
under the laws in force in the place where it is proposed to be done, is guilty of a misdemeanor and is liable to imprisonment for two years. The offender cannot be arrested without warrant.
(e)
Section 517 A also provides that any person who while in a State conspires
with another to do any act not in the State which if done in the State would be
an offence against the law of the State (other than felony) and, which is an
offence against the law of
the place where it is proposed to be done is guilty of misdeamenour and is liable to imprisonment for two years. The offender cannot be arrested without warrant.
the place where it is proposed to be done is guilty of misdeamenour and is liable to imprisonment for two years. The offender cannot be arrested without warrant.
(f)
Section 518 of the same Criminal Code Act Cap 77 of the Law of Federation
of Nigeria provides that any person who conspires with another to effect any of the following
purposes:
i.
prevent or defeat the execution of enforcement of any Act, Law, Statute, or Order; or .
II. to
cause any injury to the person or reputation of any person, or to depreciate
the value of any property of any person; or
iii. to prevent or obstruct
the free and lawful disposition of any property by the owner thereof
for its fair value; or
for its fair value; or
IV. to injure any person in his trade or profession; or
v.
to prevent or obstruct, by means of any act or acts which if
done by an individual person would constitute an offence on his part, the free and lawful exercise
by any person of his trade, profession, or occupation; or .
VI. to
effect any unlawful purpose; or
vii. to effect any lawful purpose by any
unlawful means; is guilty of a
misdemeanours, and is liable to imprisonment for two years. An offender cannot
be arrested without warrant.
(g) Section 518A also provides that the provisions of
section 516 to 518 shall not apply to an agreement or combination of two or
more persons to do procure to be
done any act in contemplation or
furtherance of a trade dispute if such act committed by one person would not be punishable as an offence: provided that nothing in this section shall exempt from punishment any persons guilty of a conspiracy for which a punishment is provided by any other enactment:
furtherance of a trade dispute if such act committed by one person would not be punishable as an offence: provided that nothing in this section shall exempt from punishment any persons guilty of a conspiracy for which a punishment is provided by any other enactment:
And
provided further that nothing in this section shall affect the law relating to
riot, unlawful assembly, breach of the peace, or sedition, or any offence
against the state.
against the state.
For
the purposes of this section however- "offence" does not include an
offence punishable only by fine; and "trade dispute" has the same
meaning as in the
Trade Unions Act.
Trade Unions Act.
4.
Section 171 Penal Code Law, 1959
This
section provides that whoever intentionally offers any resistance or illegal
obstruction to the lawful arrest of any other person or rescues or attempts to
rescue any other
person from any confinement or custody in which that person is lawfully detained, shall be punished
person from any confinement or custody in which that person is lawfully detained, shall be punished
(a)
with imprisonment for a term which may extend to 7 years or with fine or with
both;and
(b)
if such other person is under sentence of death, shall be punished with
imprisonment which may extend to imprisonment for life and shall also be liable
to fine.
Comment:
The
intention of the accused is an important ingredient of the offence. If the
arrest is itself not lawful, then resistance to the arrest will not be an
offence under this section.
Similarly, the person from whose custody a rescue is effected must have authority to detain lawfully the person rescued or no offence will have been committed in the rescue.
Similarly, the person from whose custody a rescue is effected must have authority to detain lawfully the person rescued or no offence will have been committed in the rescue.
5.. Section 513 of Criminal
Code
Act
This section provides that:
This section provides that:
1.
Any person who attempts to procure another to do an act or make
an omission of such a nature if he himself were to do the act or make the omission he would be guilty of an
offence, is himself to be deemed
guilty of attempting to commit such offence
and to be punishable accordingly.
and to be punishable accordingly.
2.Any person who while in Nigeria attempts to
procure another to do an act or make an omission at a place not in Nigeria of such
a nature-
a.that if he were himself to do the act or
make the omission in Nigeria he would be guilty of an offence; and
b.that if he were himself to do the act or
make the omission at the place where the act "or omission is proposed to be done or made he would himself be
guilty of an offence under the laws in force at that place, is guilty of an offence of
the same kind
and is liable to the same punishment as if he were himself to attempt to do the same act or make the same omission in Nigeria. See 1 RC V. Rossminster Ltd (1980) All ER 80.
and is liable to the same punishment as if he were himself to attempt to do the same act or make the same omission in Nigeria. See 1 RC V. Rossminster Ltd (1980) All ER 80.
6.
Personal Income Tax Act 2004
1)
Section 105 of this Decree provides as follows:
Any
person who-
a.
having been required to
give information under the provisions of the preceding section wilfully obstructs a Tax
Collector in the performance of his duties by neglecting or refusing to give
such information; or
b.
otherwise obstructs or wilfully misleads or attempts to mislead
a Tax Collector in the performance of his duties under this part of this Act is
guilty of an offence under this Act.
2)
Section 97 of the same Act also provides that:
A
person who –
(a)
being a person appointed for the due administration of this Act
or employed in connection with the assessment or collection of the tax –
(i)
demands from a person an amount in excess of the authorized
assessment of the tax;or
(ii)
withholds for his own use or otherwise,a portion of the amount of tax
collected;or
(iii)
renders a false return,whether orally or in writing,of the amount of tax
collected or received by him;or
(iv)
defrauds a person,embezzles any money,or otherwise uses his position to deal
wrongly with the relevant tax authority;or
(b)
not being authorised under this Act to do so,collects or
attempts to collect the tax under this Act,
is guilty of an offence and liable on
conviction to a fine of N1000 or to imprisonment for three years or both such
fine and imprisonment.
See C.O.P v. Amadu of Awe 1 NTC 30: Hellel v. A.C.l.T 1 NTC 33; Nakade v. Jos Native Authority 1 NTC 118.
See C.O.P v. Amadu of Awe 1 NTC 30: Hellel v. A.C.l.T 1 NTC 33; Nakade v. Jos Native Authority 1 NTC 118.
Conclusion
It
will be clear from the foregoing
that there are possible perils for the tax practitioner when a client is
involved, or potentially involved with the
criminal law. It seems that the
first precaution a practitioner needs to take is to avoid becoming too closely identified with his client and his client's position. It means perhaps keeping a segment of his mind
detached. Most practitioners will probably do this automatically in order to maintain an objective view of the situation in the client's own interest. A little more than that is, however, required: an awareness that the practitioner could be at risk personally unless appropriate further precautions are taken, we hope this will be of some help in indicating the form those precautions should take.
first precaution a practitioner needs to take is to avoid becoming too closely identified with his client and his client's position. It means perhaps keeping a segment of his mind
detached. Most practitioners will probably do this automatically in order to maintain an objective view of the situation in the client's own interest. A little more than that is, however, required: an awareness that the practitioner could be at risk personally unless appropriate further precautions are taken, we hope this will be of some help in indicating the form those precautions should take.
Finally, we would stress again the need for expert legal advice if the
practitioner is in any doubt of the legal effect of a course of action he is
contemplating on behalf of his client or employer.
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