The Court of Appeal in Abuja has delivered a significant ruling reinforcing the legal authority of the Economic and Financial Crimes Commission (EFCC) to investigate and prosecute tax evasion cases in Nigeria. The decision, handed down by Justice Balkisu Bello Aliyu, affirms the EFCC’s right to work in conjunction with the Federal Inland Revenue Service (FIRS) and other government agencies in probing tax-related offenses.

This ruling overturns an earlier judgment issued by Justice Taiwo O. Taiwo of the Federal High Court, Abuja, which had restrained the EFCC from investigating tax issues, claiming it was outside the Commission’s legal jurisdiction.

Legal Dispute Over EFCC’s Jurisdiction

The case originated from a lawsuit filed by Insurance Resourcery and Consultancy Service Limited, which contested the EFCC’s authority to investigate its officials over alleged tax evasion. The company argued that the EFCC had overstepped its bounds by initiating an investigation based on allegations that should fall solely under the purview of the FIRS.

Relying on provisions within the FIRS Act, the firm claimed that the EFCC lacked the statutory mandate to look into tax issues, especially when the alleged offenses centered on tax evasion and not explicitly on money laundering. Justice Taiwo agreed with the plaintiff, ruling that the EFCC could not extend its anti-money laundering investigations to include tax evasion, which he termed a “predicate offence”—a secondary offense underlying a broader criminal activity.

EFCC Takes Appeal to Higher Court

Unhappy with the verdict, the EFCC took the matter to the Court of Appeal, raising five grounds of appeal. The anti-graft agency emphasized Section 46 of the EFCC Act and insisted that its investigative scope includes offenses such as tax evasion when linked to financial crimes like money laundering.

One of the key legal questions raised on appeal was whether the lower court erred in concluding that the EFCC had no statutory right to invite or investigate officials of Insurance Resourcery and Consultancy Service Limited based on alleged tax infractions related to laundering illicit funds.

Appeal Court Delivers Landmark Ruling

In her lead judgment, Justice Balkisu Bello Aliyu dismissed the trial court’s reasoning, asserting that the EFCC does indeed possess the authority to investigate tax evasion, particularly when it serves as a predicate offense in a broader money laundering probe.

According to Justice Aliyu, “The FIRS Act specifically provides and supports collaboration between the FIRS and the EFCC and other Government Agencies in the investigation and enforcement of tax evasion.”

She further clarified that the assertion by the lower court—claiming the EFCC had no jurisdiction in tax matters—was not legally accurate. “The finding of the trial court that the Appellant cannot extend its investigation of money laundering to tax evasion as a predicate offence is not supported by law and therefore wrong, and I so hold,” she declared.

The court concluded that EFCC’s powers under Section 46 of its enabling Act lawfully extend to investigating financial crimes linked to tax offenses. This interpretation solidifies the EFCC’s mandate in pursuing tax-related crimes that are part of wider financial criminality.

Judgment Set Aside

The appellate court, comprising Justices Balkisu Bello Aliyu, Adebukunola Banjoko, and Okon Efreki Abang, unanimously allowed the appeal and nullified the decision of the Federal High Court delivered on July 28, 2022.

Justice Aliyu summarized the ruling by stating that “having resolved the two issues for determination in favour of the Appellant means that the appeal is meritorious and it is allowed by me.”

The appeal court’s decision means that the EFCC can now lawfully continue its investigation into the company’s tax dealings and extend its inquiries to any similar cases that involve tax evasion intertwined with money laundering or other financial crimes.

Implications of the Ruling

This judgment sets a significant legal precedent that strengthens inter-agency collaboration in Nigeria’s anti-corruption and financial crime frameworks. The EFCC, often focused on corruption, banking fraud, and money laundering, can now pursue tax evasion cases without legal ambiguity when such offenses are linked to wider economic and financial crimes.

It also reaffirms the legality of cooperative frameworks embedded in Nigeria’s financial regulatory system. By validating the FIRS-EFCC collaboration, the judgment enhances the country’s ability to combat tax-related criminal activities, often used as conduits for laundering illicit wealth or financing organized crime.

Legal observers believe the verdict will serve as a deterrent to individuals and corporations who believe they can evade taxes with impunity, assuming that only the FIRS holds jurisdiction.

Moreover, the ruling could encourage deeper data-sharing, joint investigations, and coordinated enforcement actions among government agencies, as Nigeria continues its battle against financial crimes that undermine public revenue and economic development.

As tax compliance becomes a crucial component of national economic recovery strategies, especially in the face of dwindling oil revenues, the EFCC’s renewed authority will be a powerful tool in curbing both high-profile and routine tax evasion schemes.

Conclusion

The Abuja Division of the Court of Appeal has conclusively declared that the EFCC possesses the statutory authority to investigate and prosecute tax evasion cases, especially when such offenses form part of money laundering or other economic crimes. By setting aside the lower court’s ruling, the appellate judges have reinforced the EFCC’s ability to partner with FIRS and bolster the fight against financial crimes in Nigeria.