Browsing by Author "Isau Olatunji Ahmed"

Now showing 1 - 12 of 12
  • Thumbnail Image
    Item
    A Comparative Analysis of Judicial Attitude to the Interpretation of Taxation Statutes in Nigeria, United Kingdom and United States.
    (Department of Private Law, University of Maiduguri., 2021) Isau Olatunji Ahmed
    Under the concept of separation of powers, the Judiciary is the arm of government saddled with responsibility of interpretation of law. In discharging this onerous responsibility, there are some rules of interpretation that have been developed overtime to guide judges in this regard. Taxation statutes, unlike other civil statutes, are regarded as penal in nature and therefore taxpayers of their proprietary rights. The courts, therefore, usually give strict interpretation to taxation statutes bearing in mind that finding against the taxpayer will result in deprivation in part of his profit and interest. On other occasions, however, the courts have been liberal in their interpretation of taxation statutes. This is suggestive of the fact that interpretation of taxation statutes can be dependent on the judges, but rather, it varies from country to country due to the understanding of the judge involved as well as the peculiar facts and circumstances of the case. Therefore, in order assess the attitude of courts towards taxation statute, this article uses the interpretation of taxation statutes in Nigeria, United Kingdom and United States as a yardstick for comparative analysis of judicial attitude to interpretation of taxation statutes across these three tax jurisdictions namely Nigeria, United Kingdom and the United States.
  • Thumbnail Image
    Item
    An Analysis of the Challenges in taxing Digital and E-Commerce Economy in Nigeria.
    (Faculty of Law, Nigeria Turkish Nile University, Abuja., 2018) Isau Olatunji Ahmed
    The normative basis for the taxation of foreign companies under the international tax rules is rooted in the traditional requirement of maintaining such companies to establish physical and taxable presence in the form of a ‘permanent establishment (PE)’ in a country upon which their income and profit will be subjected to tax. In line with this, the provision of Section 54 of the Companies and Allied Matters Act (CAMA) requires foreign companies desirous of carrying on business in Nigeria to incorporate a separate entity for that purpose. However, the advent of globalization led to the emergence of digital and e-commerce companies that could extend their business activities to other countries without necessarily having a PE. This altered the basis of taxation under the international tax rules and created a situation whereby such companies can carry out business activities in Nigeria without having physical and taxable presence in the country. The implication of this is that such companies usually avoid tax in the country. This constitute a significant challenge for a developing country such as Nigeria. Yet, there is no clear rules in the country on how the income and profit of such companies will be subjected to tax while had resulted in substantial revenue loss. The objective of this article is to examine the nature and the tax challenges of the digital and e-commerce economy. The article will also examine the various recommendations that have been made by the international community led by the Organization for Economic Cooperation and Development (OECD) for countries to overcome these tax challenges. The article recommended that the Nigeria government should urgently put in place necessary legal framework and administrative procedures to domesticate and implement the various recommendations of the OECD in this regard to prevent loss of revenue.
  • Thumbnail Image
    Item
    An examination of the dispute resolution mechanisms under Double tax treaties for resolving international tax disputes.
    (Faculty of Law, Ajayi Crowther University Oyo., 2021) Isau Olatunji Ahmed
    The purpose of a Double Tax Treaty is to promote international trade by eliminating double taxation that could arise when two sovereign countries decide to tax the same income and capital of a taxpayer under their respective domestic tax laws. Nonetheless, differences in opinion between two sovereign countries as to the interpretation and application of the provisions of the Double Tax Treaty can create an international tax dispute as to who between the two sovereign countries has the right to impose tax on the income and capital. An unresolved international tax dispute has the potential of exposing cross-border income and capital to double taxation which can undermine and discourage international trade and investment. It is in this regard that Double Tax Treaties contain certain dispute resolution mechanisms to resolve international tax disputes without necessarily going through lengthy litigation proceedings which can be uncertain, expensive and time consuming. The objective of this article is to examine the dispute resolution mechanisms under the Organisation for Economic Co operation and Development (OECD)’s Model Double Tax Convention for resolving international tax disputes. The article also examined the resolution of international tax disputes in Nigeria.
  • Thumbnail Image
    Item
    An Examination of the Evolution and Challenges of Child’s Rights in Nigeria.
    (Faculty of Humanities, Management and Social Sciences Kwara State University, Malete., 2020) Isau Olatunji Ahmed
    It is a general belief that children are the future of tomorrow and due to their fragile nature, they are to be loved, cherished and nurtured until they attain the age of maturity. However, the last decade in Nigeria recorded a dramatic increase in the number of violent crimes against children. Children in Nigeria today are more susceptible to abduction, and other forms of abuse such as sexual, physical, and ritualistic killings. Even though it is not only children that suffer from these violent crimes, they are the most affected due to their weak nature. The abduction of over 200 secondary school female children in Chibok, North East of Nigeria and the recent trend of using children as suicide bombers are pointers to the fact that violent crimes against children are taking a dangerous dimension and more needs to be done to protect and safeguard the inalienable rights of the Nigerian child. This article adopts a library‑based research methodology to examine the concept of a child and the evolution of child’s rights under the United Nations Convention on the Rights of the Child (UNCRC). The article also examines the child’s rights in Nigeria and the challenges confronting such rights.
  • Thumbnail Image
    Item
    An Overview of the Reporting and Compliance requirements under the Income Tax (Country by Country Reporting) Regulations.
    (Faculty of Law, University of Ilorin, College of Law, Kwara State University, Faculty of Law, Al-Hikmah University and Nigerian Bar Association Ilorin Branch., 2020) Isau Olatunji Ahmed
    The technological advancements in transportation and communication led to the emergence of Multinational Corporation (MNC) groups. A MNC group consist of a ‘parent company’ and ‘subsidiary companies’ that are located in different countries thereby creating a ‘parent-subsidiary relationship’. The geographical boundaries between companies within the group means that it is possible for international transfer of goods and services to occur. The process of setting the price of such transaction is known as ‘transfer pricing’ while the price charged is known as ‘transfer price’. The MNCs sometimes exploit their ‘parent-subsidiary relationship’ to avoid tax which can impact negatively on revenue accruable to the government. This is commonly referred to as abuse of transfer pricing, transfer pricing manipulation, transfer mispricing, incorrect pricing, unjustified pricing or non-arm’s length pricing. Abuse of transfer pricing simply means the intentional over-invoicing or pricing or under-invoicing or pricing of the transfer prices of goods and services of an intra-company transaction for the purpose of reducing the global tax burden of a MNC group. In this regard, overpricing of outbound transfers can be used to shift profits or income out of a subsidiary located in a high-tax jurisdiction or country to a low tax jurisdiction/country while underpricing of inbound transfers can be used to minimise the tax payable in a high tax jurisdiction. Abuse of transfer pricing is now generally considered as a major threat to the tax base of many countries impacting negatively on their revenue generation. To regulate transfer pricing in order to prevent the possibility of its abuse by MNCs, the Organisation of Economic Cooperation and Development (OECD) through its Model Tax Convention of 1963 recommended the ‘arm’s length principle’ (ALP) as the international standard for assessing and regulating transfer pricing. The application of the ALP is predicated on treating the members of a MNC group (that is, the parent-company and its subsidiaries located in different countries) as separate, distinct or independent entities and using the price charged by independent entities in a similar comparable transaction to benchmark the transfer price to be charged. In its effort to provide guidance on the application of the ALP, the OECD released a Transfer Pricing Guidelines in 1979 which was later updated in 1995 known as the ‘OECD Transfer Pricing Guidelines (OECD TPG 1995)’. The 1995 OECD TPG was in 2010 with the introduction of another guideline known as the ‘OECD Transfer Pricing Guidelines for Multinational Enterprises and Tax Administrations’ which was in response to the enormous changes and challenges posed by the new globalised economy. One of the criticism often levied against the OECD TPG 2010 is that it did not specify the documents to be included in a transfer pricing documentation package as taxpayers were only required to provide reasonable documents to show that their intra-company transactions were conducted at arm’s length. The absence of specific documents in this regard constitute a serious challenge to the application of the ALP because both the taxpayers and the tax authorities may not necessarily have ideas about the types of documents to be provided. To correct this anomaly, the OECD recommended the introduction of a three-tiered standardised transfer pricing documentation framework: (i) Master File; (ii) Local File; and (iii) a Country-by-Country Report. This recommendation was part of the 15-Action Plan developed by the OECD and the G20 to address the issue of Profit shifting under a general package known as Base Erosion and Profit Shifting (BEPS) Project. In Nigeria, prior to 2018, transfer pricing was regulated in the country through the Income Tax (Transfer Pricing) Regulations 2012 which was based on the 2010 OECD Transfer Pricing Guidelines for Multinational Enterprises and Tax Administrations. This means that the Income Tax (Transfer Pricing) Regulations 2012 was not immune from the criticism levied against the 2010 OECD TPG in that it did not specify the documents to be included in a transfer pricing documentation package. For example, the Income Tax (Transfer Pricing) Regulation 2012 did not specify the list of documents to be included in the transfer pricing documentation package, it only requires the MNCs to provide sufficient information or data to verify that their controlled transactions are consistent with the ALP. This created a lot of uncertainties with regard to the minimum transfer pricing documentation requirements. The uncertainties in this regard resulted in conflict between the MNCs and the FIRS as to the documents to be provided. It also created ambiguities in transfer pricing documentation leading to an increment in compliance cost on the part of the taxpayer and also leading to conflict between the taxpayers and the FIRS. It was therefore in response to the OECD recommendation and to ensure certainty in transfer pricing documentation that the Nigerian government through the Federal Inland Revenue Service (FIRS) released the Income Tax (Country by Country Reporting) Regulations on 19th June 2018. This is seen as a significant attempt by the Nigerian government to ensure certainty in transfer pricing documentation requirements and to reduce compliance burdens on the MNCs in line with the OECD recommendation. This article examines Action 13 of the OECD/G20 BEPS Project and the reporting and compliance requirements under the Income Tax (Country by Country Reporting) Regulations 2018.
  • Thumbnail Image
    Item
    An Overview of the Tax Amendments under the Finance Act, 2020.
    (Kwara State University, University of Ilorin, Al-Hikmah University and Nigerian Bar Association, Ilorin Branch., 2023) Isau Olatunji Ahmed
    On 31st day of December 2020, President Muhammadu Buhari, GCFR, assented to the Finance Bill 2020 which had earlier been passed by both the Senate and the House of Representatives respectively on 15th December 2020 and 17th December 2020. With this assent, the Finance Bill 2020 became known as the Finance Act 2020. The Finance Act, 2020 made some significant and fundamental amendments to various tax legislations in Nigeria. These amendments have various implications which must be noted by taxpayers in order to avoid sanction from the regulatory bodies. The objective of this article therefore is to provide an overview of the tax amendments introduced by Finance Act, 2020. This will go a long way to assist taxpayers understand their obligations under the amended tax legislations.
  • Thumbnail Image
    Item
    Civil Aviation Offences under the Civil Aviation Act, 2006.
    (Faculty of Law, Rivers State University, Port Harcourt., 2017) Ismail Adua Mustapha; N. O. A. Ijaiya; Isau Olatunji Ahmed
    Aviation offence is an act of unlawful interference with civil aviation that is punishable by the State. Civil aviation across the globe has suffered from the menace of the consequence of which affected the international aviation communities under the Nigerian Civil Aviation Act 2006 were prior to known what ambience could research methodologically. It is found that some offences are inexcusably omitted in the Act and that non-inclusion of technological means to commit any of the offences is a grave omission in this 21st century. The paper therefore called for a review of the Act to include the omitted offences so as to be in line with the current Anti-Security Convention, which is 2010 Beijing Convention on the Suppression of Unlawful Acts Relating to International Civil Aviation, and Protocol Supplementary to Hague Convention 1970 done at Beijing on 10 September 2010.
  • Thumbnail Image
    Item
    Examination of taxation of employment income under the Personal Income Tax Act.
    (Faculty of Law, Kwara State University, Malete., 2021) Isau Olatunji Ahmed
    Every country in the world tends to generate income through taxation. In Nigeria, taxation of employment income constitutes a major source of revenue for state governments. Over the last couple of decades, taxation of employment income has become a major source of internal generated revenue for state government. The prominence of taxation of employment income has evolved owing to the low prices of crude oil in the international market leading to reduction in revenue allocation to the States. Taxation of employment income in Nigeria is administered under the Personal Income Tax Act (PITA). This paper examines the taxation of employment income under the Personal Income Tax Act (PITA).
  • Thumbnail Image
    Item
    Examination of the Anti-Avoidance Measures to Counter Tax Treaty Abuse/Shopping.
    (Private and Business Law Department, Al-Hikmah University, Ilorin., 2021) Isau Olatunji Ahmed
    A Double Tax Treaty (DTT) is a bilateral agreement between two countries aimed at eliminating double taxation to encourage international trade and investment. Usually, the benefit of relief of double taxation provided under a DTT is only available to taxpayers who are resident in both or one of the countries that is a party to DTT. The implication of this is that, taxpayers who are not resident in either of the country that is a party to DTT are ineligible to enjoy the benefit of relief of double taxation provided by DTT. However, in recent years, through the ingenuity and assistance of accountants, lawyers, tax consultants and advisors, taxpayers are now able to set up structures which makes it possible for them to enjoy the benefit offered by a DTT even though they are not resident in either of the country that is a party to DTT. This constitute an improper use of tax treaty to gain a tax advantage which is now generally referred to as ‘tax treaty abuse/shopping’. ‘Tax treaty abuse/shopping’ is considered as a form of tax avoidance or evasion that can negatively impact on government’s revenue generation. It is in this regard that the Organisation for Economic Co-operation and Development (OECD) introduced certain anti-avoidance measures to counter treaty abuse/shopping. The objective of this article is to examine the various anti-avoidance measures introduced by OECD to counter treaty abuse/shopping. The article also examines the current position of the Nigerian government on tax treaty abuse/shopping.
  • Thumbnail Image
    Item
    EXAMINATION OF THE CHALLENGES OF REPLACING THE ARM’S LENGTH PRINCIPLE WITH FORMULARY APPORTIONMENT AS STANDARD FOR ASSESSING TRANSFER PRICING.
    (Department of Jurisprudence and International Law, University of Ilorin., 2020) Isau Olatunji Ahmed
    The Arm’s Length Principle (ALP) is the cornerstone of the current transfer pricing regulation as recommended by both the Organisation for Economic Cooperation and Development (OECD) and the United Nations (UN).The application of ALP is predicated on treating members of a Multinational Corporation (MNC) Group (that is, the parent company and its subsidiaries)as separate legal entities and using the prices charged in a transaction between independent entitiesin an open marketto determine or benchmark the appropriate price to be charged in a transaction among the members of the MNC group. The application of the ALP looks straight forward in theory and it was considered as the best possible standard to assess and regulate transfer pricing. However, with the advent of globalization and with the introduction of sophisticated communication systems and advanced high speed information technologies, the practical application of the ALP became a difficult and herculean task. This has provoked a lively debate and arguments for the replacement of the ALP with the Formulary Apportionment which is held to be more suitable for the new globalized economy. The objective of this paper is to examine the application of the ALP and its challenges in the new globalized economy. The paper considers the application of the Formulary Apportionment as well as its prospect and challenges in replacing the ALP as the international standard for assessing transfer pricing.
  • Thumbnail Image
    Item
    Examination of the Transfer Pricing challenges of Hard to Value Intangibles (HITV).
    (Department of Jurisprudence and Private Law, Obafemi Awolowo University, Ile Ife., 2021) Isau Olatunji Ahmed
    The Arm's Length Principle (ALP) is the cornerstone of the current transfer pricing regime. The application of the ALP is predicated on using the price charged in transactions between independent entities in an open market to determine or benchmark the appropriate transfer price to be charged in transactions between associated entities within a Multinational Corporation (MNC) Group. At the time when the ALP was adopted, transactions in tangible items were prevalent and there were comparative market prices to determine the appropriate transfer price. The ALP was therefore considered as the best possible means to ensure that profits of associated entities derived from cross-border transactions are allocated in a way that is fair between the MNCs and the different tax jurisdictions in which they are doing business. However, advancements in technology gave rise to new business models that shifted transactions from the traditional tangible items to intangible items. These intangible items are unique items in the sense that they are hard to value due to the absence of comparative market prices to determine the transfer price. This constitutes a practical challenge to the application of the ALP which can create opportunities for tax avoidance. The objective of this article is to examine the nature of Hard to Value Intangible and its challenges to the application of the ALP. The article will also examine the recommendations proposed by the Organisation for Economic Cooperation and Development to overcome this challenge. The article examined the transfer pricing treatment of intangibles in Nigeria.
  • Thumbnail Image
    Item
    Tax Avoidance: the fiscal termite eating away the revenue base of Nigeria
    (Coventry University, 2022) Isau Olatunji Ahmed
    The need for the Nigerian government to provide social amenities and embark on developmental projects to improve the living standards of its citizens and to meet its overhead or recurrent expenditures, necessitate the need for the government to intensify its revenue generation efforts. Taxation is now generally regarded as an important source of revenue generation for the Nigerian government, which involve levying taxes on individuals, corporate entities, and goods and services. This is due to the fact that, through taxation, the government is able to raise a significant amount of revenue to meet its needs and provide basic amenities for its citizens. The Nigerian government through its revenue agency, Federal Inland Revenue Service (FIRS), stated that it generated about 1.97 trillion Naira (5 billion US dollars) through taxation in the first half of 2015, which represented 98 per cent of the targeted revenue of 2.28 trillion Naira (7 billion US dollars) for January and June 2015. Likewise, in 2018, the government disclosed that it generated 5.320 trillion Naira (13 billion US dollars) from taxation. This was said to be the highest revenue generated from taxation in the history of Nigeria as at 2018. However, in recent times, the government’s revenue generation efforts from taxation have been impeded by certain fiscal resistant tactics such as tax avoidance, which has resulted in huge revenue loss to the government. According to the Global Financial Integrity, close to 100 billion US dollars per year is lost in revenue to tax avoidance in developing countries. Another report compiled by Christian Aid estimates that revenue lost to tax avoidance each year in developing countries could rise to 160 billion US dollars. Tax avoidance, alongside other concepts such as tax evasion and tax planning, has been described as fiscal termites eating away the potential tax revenue of the government. Unlike tax evasion and tax planning, which are generally considered as legal and illegal respectively, there is no such clear cut classification for tax avoidance, thereby posing a serious threat to the government’s revenue generation efforts. The magnitude of potential revenue lost to tax avoidance is having a significant negative impact on the government, which requires revenue to improve essential services to its citizens.7 This has made the government pay closer attention to the issue of tax avoidance, which has the potential of the depriving the government of the revenue needed to cater for the citizens.8 This necessitated the need for the government to put in place mechanisms to prevent tax avoidance. The objective of this article is to examine the concept of tax avoidance and its underlying incentives. The article also examines the impact of tax avoidance and the mechanisms to prevent or counter it.