NECA secures judgement against customs service over additional tax

By Aisha Uthman

The Nigeria Employers’ Consultative Association (NECA) has secured a judgment for its members against the federal government on the proposed plan to impose additional tax burdens on businesses.

In a suit filed in 2022, following a circular from the federal government, which proposed to impose additional tax burdens on businesses through the introduction of excise duty on non-alcoholic, carbonated and sweetened beverages, NECA had requested the court to dismiss the case on the ground that the circular was invalid and unjustifiable.

Other defendants joined in the suit include minister of Finance, and the minister of budget and national planning.

After three years of legal fireworks, O.A Egwuatu, the presiding judge of the federal high court, Abuja dismissed the second defendant’s preliminary objection for lack of merit.

Delivering judgment on the substantive case, Egwuatu held that the circular issued by the federal ministry of finance is invalid and ultra-vires.

The judge noted that the second defendant; and the first defendant (the customs service) are not entitled to demand transport and feeding allowances from the plaintiffs (NECA members).

The court further declared that the circular entitled “Approval for the Implementation of 2022 Fiscal Policy Measures and Tariff Amendments,” dated March 1, 2022, issued by the ministers of finance, budget and national planning is invalid and ultra-vires the powers of the second defendant

In his reaction shortly after the verdict, Adewale Smatt-Oyerinde, the director-general of NECA, described the judgment as another victory for organised businesses against official arbitrariness and unfortunate attempts to impose additional burdens on businesses.

NECA) was formed in 1957 to provide a forum for the government to consult with private sector employers on socio-economic and labour policy issues. It is the umbrella organisation of employers in the organised private sector of Nigeria.