ICAN can't regulate Nigerian tax profession, says court

Abstract

The Chartered Institute of Taxation of Nigeria (CITN) has won a lengthy dispute against the Institute of Chartered Accountants of Nigeria (ICAN) over which body should regulate the taxation profession in the country. The Lagos High Court has ruled that the country's taxation profession is separate and distinct from accountancy and that the CITN should be the only body recognized by law to regulate the taxation profession. The court also ruled that ICAN members who are not members of the CITN should not practise, represent or hold themselves out as tax administrators or practitioners.

The Chartered Institute of Taxation of Nigeria (CITN) has won a lengthy dispute against the Institute of Chartered Accountants of Nigeria (ICAN) over which body should regulate the taxation profession in the country.

Justice Latifat Okumu of the Lagos High Court has ruled that the country's taxation profession is separate and distinct from accountancy and that the CITN should be the only body recognised by law to regulate the taxation profession. CITN president Foluso Fasoto commented: "I am happy that the court has affirmed our unfettered power to regulate and control [the] taxation profession in Nigeria."

Finding in favour of the tax institute, the court also ruled that ICAN members who are not members of the CITN should not practise, represent or hold themselves out as tax administrators or practitioners. It was also deemed unlawful for the ICAN to stand in the way of the CITN's efforts to regulate tax in Nigeria. Counter-claims submitted by the ICAN were dismissed by the court.

After the case, Fasoto said he was optimistic that the relationship between the two bodies would not be affected.

In a statement, however, the ICAN pledged to appeal the verdict, calling it "one-sided, arbitrary and to say the least below expectation". The chartered accountants' institute added: "We wish to assure our members that the institute will not shy away from defending the ICAN Act, but will pursue the case to its logical conclusion at the superior courts." The institute called for members to "remain calm and continue to carry out their lawful business of accountancy practice".

The CITN said it initiated the suit in October 2005 after the ICAN withdrew from negotiations on the terms of admission to the tax institute's membership. The CITN added that ICAN members were then ordered by their institute to withdraw from the tax body and told "they were free to practise taxation without CITN regulation".

The ICAN claimed that the dispute began after the CITN "decided to enforce some provisions in its enabling law and, through this, sought to exclude chartered accountants from practising taxation despite the fact that they had practised the same for over 40 years". Letters written to government agencies such as the Federal Inland Revenue and the State Internal Revenue Services by the CITN requested they not accept tax returns filed by non-members. The tax authorities were then contacted by the ICAN over the matter and the institute said they agreed "that ICAN did not need CITN to practise taxation". In 2005, members decided to withdraw their membership of the tax institute in defence of their professional body, the ICAN said.

The institute's argument centres around the belief that taxation is one of the core areas of the accountancy profession "and a chartered accountant does not need to be a member of CITN to practise what he had been trained to do".

ICAN currently has over 17,000 members and 90,000 students on its register. The CITN has 8,598 professional members.

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