Appeal Court upholds EFCC’s power to investigate tax evasion

The Court of Appeal in Abuja, on Friday, affirmed the Economic and Financial Crimes Commission’s (EFCC) statutory power to investigate and prosecute cases of tax evasion and other tax-related offences.

The unanimous judgement of the court’s three-member panel overturned a previous ruling by the Federal High Court in Abuja.

The judgement arose from an appeal filed by the EFCC against a ruling by Taiwo Taiwo, now retired judge of the Federal High Court, Abuja.

The lower court had initially held that the EFCC lacked the statutory authority to investigate tax evasion and could not extend its money laundering investigations to include tax evasion as a predicate offence.

This earlier decision was prompted by a suit filed by Insurance Resourcery and Consultancy Service Limited, which had challenged the EFCC’s invitation and investigation of its officials for alleged tax evasion, arguing that EFCC was not competent to do so under the Federal Inland Revenue Service (FIRS) Act.

Dissatisfied with the trial court’s decision, the EFCC appealed, relying on Section 46 of its enabling Act. One of the key grounds of appeal was whether the trial court was correct in concluding that the commission lacked the statutory power to invite or investigate a company for money laundering where tax evasion served as the predicate offense.

The lead judgement delivered by Balkisu Bello Aliyu stated that the trial judge erred in holding that the EFCC had no power to investigate tax evasion, citing Section 46 of the EFCC Act.

Furthermore, she emphasised that the FIRS Act itself explicitly provides for and supports collaboration between the FIRS, the EFCC, and other government agencies in the investigation and enforcement of tax evasion.

Consequently, the appellate court found that the trial court’s finding that the EFCC could not extend its investigation of money laundering to tax evasion as a predicate offense was unsupported by law and therefore incorrect.

Ms Aliyu also resolved other issues for determination in favour of the EFCC, declaring that the appeal was meritorious. As a result, the judgment of the Federal High Court, delivered on 28 July 2022, in Suit No: FHC/ABJ/CS/457/2022, was set aside in its entirety.

Two other justices on the panel – Adebukola Banjoko and Okon Efreki Abang – concurred.

The Court of Appeal decision clarifies and strengthens the EFCC’s mandate in combating financial crimes, particularly those intertwined with tax evasion.

The case highlights the unwavering efforts of EFCC’s antagonists to whittle down the powers and shrink the mandate areas of the commission over the years.

Friday’s decision comes on the heels of last year’s judgment of the Supreme Court throwing out one of such suits aimed at chipping away at the powers of the agency.

In the judgement, the Supreme Court dismissed the suit filed by some state governments led by Kogi State to challenge the establishment and prosecutorial powers of Nigeria’s key anti-corruption agencies, including the EFCC. The suit, which invoked the original of the Supreme Court, was initiated at the peak of the efforts of the EFCC to apprehend former Kogi State Governor Yahaya Bello over corruption charges pending against him in court last year.