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July 1, 2021

Nigeria’s Federal High Court Issues Practice Directions on tax matters related to the Federal Inland Revenue Service

Executive summary

The Chief Judge of the Nigeria Federal High Court (FHC), Justice John Terhemba Tsoho, in exercise of the powers conferred on him by Order 57, Rule 3 of the FHC (Civil Procedure) Rules 2019, recently issued the FHC (Federal Inland Revenue Service (FIRS)) Practice Directions, 2021. The Practice Directions (PD) addresses matters relating to/or arising from tax disputes between taxpayers and the FIRS.

The PD, issued on 31 May 2021, and effective 1 June 2021, is specifically intended to foster an effective litigation management system and expedite the determination of tax-related matters in Nigeria by inter alia, promoting the use of electronic filing, service systems and proceedings with respect to tax-related matters and providing directions on applications to the FHC by the FIRS.

The objective of the PD, which is to promote an effective tax dispute resolution system, is a positive development for the Nigerian tax and legal system.

This Alert summarizes the relevant provisions of the PD.

Detailed discussion

Major provisions of the FIRS’ Practice Directions

  • The FIRS may file a motion ex-parte to the FHC in the following cases:
    • An interim order of forfeiture on immovable property or freezing of a taxpayer’s bank account
    • An ex-parte order of Court for the FIRS to have access to the taxpayer’s books, documents, servers, billing systems, bank accounts, including those stored in a computer, in digital, magnetic, optical and or electronic form
    • An ex-parte Order of Court for the FIRS to have access and/or seal the business premises or other known places of business of a taxpayer
  • Service of court processes may be effected by e-mail, WhatsApp and a printout of same i.e., the document served electronically, shall be sufficient proof of service of the notice.
  • A taxpayer intending to challenge an assessment served on him/her by the FIRS, will have to pay half of the assessed amount into an interest yielding account of the FHC, pending a determination of the application.

The legality of Practice Directions

PDs are generally guidelines that have the force of law, and are expected to direct the form, manner and order of adjudication in the Courts, according to the principles of law and the rules set forth by the respective courts.

Notwithstanding that PDs have the force of law, they are ranked the lowest in terms of authority under the Nigerian hierarchy of jurisprudence. As such, the validity of a PD is upheld only to the extent that the provisions of such PD were made within the parameters of the relevant laws.

Furthermore, PDs lack the legal capacity to expand, introduce or provide guidelines outside the scope of its enabling statutes, thus, where there is a conflict between a PD and its enabling statutes (in this instance, the tax laws i.e., the Companies Income Tax Act (CITA) and the Federal Inland Revenue Service Establishment Act (FIRSEA)), or the Nigerian Constitution, the PD would cease to have the force of law to the extent of any such inconsistency.


It is important to note that certain provisions of the PD, such as the application for an interim order of forfeiture on immovable property, the requirement for a taxpayer to settle half of the contested tax liability into an interest yielding account, among others, are not provided for within the present laws i.e., the FIRSEA or the CITA.

Therefore, it may be necessary for the FIRS to engage with stakeholders prior to implementing the PD, to avoid issues that could result in increased disputes and/or litigation, if the PD was to be implemented in its current state.


For additional information with respect to this Alert, please contact the following:

Ernst & Young Nigeria, Lagos

Ernst & Young Société d’Avocats, Pan African Tax – Transfer Pricing Desk, Paris

Ernst & Young LLP (United Kingdom), Pan African Tax Desk, London

Ernst & Young LLP (United States), Pan African Tax Desk, New York


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