POSITION PAPER ON THE INSTITUTE OF CHARTERED ACCOUNTANTS OF NIGERIA (ICAN) AMENDMENT BILL 2023 (SB265) AT A PUBLIC HEARING HOLDING AT THE NATIONAL ASSEMBLY

Introduction

Distinguished Senate President, Distinguished Senators of the Federal Republic of Nigeria, all other protocols duly observed.

Tax Payers Right Initiative (TRI) is an advocacy group that seeks to protect the rights of taxpayers and promote tax environment that will guarantee maximum revenue yield to the government at all levels and inculcate the culture of compliance with tax legislations.

The aims of the Initiative, among others, include:

• Protecting the rights of taxpayers,
• Promoting tax environment that will guarantee maximum revenue yield to the government at all levels, and
• Promoting culture of compliance with tax legislations.

Mr. Chairman, Distinguished Senators, we want to use this golden opportunity to lend our voice to the developmental progress that has been achieved in the Nigerian fiscal environment over the past years. For us, we can safely say that our dear Nation, Nigeria, is on the right path to fiscal sustainability.

Having said that, TRI believes that the gains recorded by successive governments and being advanced by the current government in Nigeria may be reversed if an evolving development in the regulatory environment is not properly addressed. We are aware that taxation in Nigeria is currently a distinct profession with a professional body established by an Act of the National Assembly, the CITN Act, Cap. C10, Volume 2, Laws of the Federation of Nigeria (2004) to regulate the practice of the profession in all its ramifications. That enabled Body is the Chartered Institute of Taxation of Nigeria (CITN).

TRI also believes that the ICAN Act which was enacted in 1965 is due for a review to conform with emerging trends. However, some of the contents and areas of focus of the current Institute of Chartered Accountants of Nigeria (ICAN) Amendment Bill 2023 (SB265) did not align with existing laws and practice in the country. The amendment seeks to expand the scope of functions to be performed by a Chartered Accountant to cover other professional areas in an era of specialisation instead of concentrating on reinforcing and strengthening the established areas of operation of ICAN.

Reasons Why the ICAN Bill Should not be Passed as Proposed

1. Specialisation and Professionalism

As a taxpayer advocacy body, we are worried that tax practice was listed as part of services to be performed by a Chartered Accountant with Section 21 of the of the ICAN Amendment Bill 2023 (SB265) allowing Chartered Accountants to practice as Tax Practitioners, and Section 28 defining a Chartered Accountant as a “Tax Practitioner”.

Retaining these clauses in the ICAN Act (Amendment) Bill 2023 (SB265) and passing it into law will be contradicting an existing law yet to be repealed. Why would we throw away the twin engine that has continued to enhance Tax Practice in Nigeria? Why should legislations create avoidable legislative contradictions capable of drawing back the hands of the clock? Where then lies specialisation and professionalism? Why should we allow this Bill about to be passed to fashion crisis within the Nigerian system thereby creating a situation where other professional bodies will approach the National Assembly to amend their Acts to include professions expressly legislated for other bodies?

It will also interest this Assembly to know that Taxation is a stand-alone Course in many Institutions of higher learning in Nigeria today. There are so many tertiary institutions offering taxation as stand-alone course. This also shows clearly that taxation is not an integral part of Accountancy in Nigeria. Accommodating ICAN’s pursuit, will send wrong signals to budding Tax Practitioners.

2. Regulation and Oversight

There is no doubt that both CITN and ICAN just like other professional bodies in Nigeria and the world over are regulatory bodies created by the legislature to enforce and/or implement laws that have been passed and signed into law. The sole purpose of which is to protect the overall interest of the Nation.

Distinguished Senators, an Act of this august Assembly, the CITN Act, Cap. C10, Volume 2, Laws of the Federation of Nigeria 2004 empowers the Chartered Institute of Taxation of Nigeria to regulate taxation practice in all its ramifications, and that law, to our knowledge has neither been repealed nor abrogated. The attempt by ICAN to venture into regulating taxation practice in Nigeria is tantamount to creating confusion and inefficiency in the fiscal environment. No matter how ferocious a dog is, it cannot guard two houses irrespective of the proximity of the houses to each other. It will result in the neglect of one house or an inefficient watch of both.

Allowing two professional associations, in this case CITN and ICAN (which is to regulate accountancy) to regulate one profession, taxation, can lead to conflict of interest, duplication of efforts, confusion for the profession, and increased cost among others. This consequently will result in a waste of resources and which can ultimately affect revenue projections of government.

If ICAN wants to regulate taxation because Accountants offered taxation a course, will ICAN then proceed to regulate other professions like Law and Economics which are also courses Accountants offered? Will ICAN be ready to allow CITN to regulate accountancy since accounting subjects form part of the courses offered by Tax practitioners? Or very unlikely, the Nigeria Society of Engineers to include regulation of accountancy since accounting was a unit course.

Again, if NAFDAC is not venturing into the activities of SON, and FIRS is not dabbling into the functions of RAMFAC, while should ICAN whose responsibilities is to regulate accounting practice poke nose into regulation of taxation practice. This attempt by ICAN is akin to similar shot in Ghana by the Institute of Chartered Accountants of Ghana’s attempt to include taxation in their Act but was rejected by the Parliament in 2020 since the subject was contained in that of Chartered Institute of Taxation, Ghana

3. Articleship

Distinguished Senate President, Distinguished Senators, Chartered Institute of Taxation of Nigeria (CITN) is to Tax Professionals what the Nigerian Law School is to Lawyers, what the Pharmaceutical Council of Nigeria (PCN) is to Pharmacist, and what Medical and Dental Council of Nigeria (MDCN) is to Medical and Dental practitioners. If Pharmacy practice and Medical practice, both in the health sector, are being regulated by different enabling bodies, why should the fiscal environment be different? Allowing ICAN to regulate Taxation practice is an abnormality that should not be allowed to stand as it will distort the sanity in fiscal practice in Nigeria.

Conclusion

Distinguished Senate President, Distinguished Senators, TRI is aware that a similar attempt by ICAN and some of its members to subjugate, superintend and override CITN Act by contesting CITN powers to regulate tax practice in Nigeria. By way of information and fact, in a judgment delivered by Hon. Justice Lateefat Okunnu of the Lagos High Court on 12th March, 2007 in suit No M/476/2005, it was held that “taxation is legally recognised in Nigeria as a profession separate and distinct from the accountancy profession”. ICAN’s suits at both the Court of Appeal and the Supreme Court (CA/L/673/07 & SC.492/2013) to overturn this judicial decision also failed in its entirety. Why is ICAN trying again to manipulate this august Assembly to incorporate Taxation into Accounting Practice?

This August Assembly will be pleased to know that on 31st May, 2021, ICAN, ANAN and CITN signed an MOU clarifying the scope of duties to be carried out by the members of each Institute/Association with respect to taxation practice. Specifically, ANAN and ICAN members by the MOU are responsible for professionally prepared and audited accounts while CITN members are responsible for taxation related matters. The implementation of the MOU is substantially contributing to the current sanity being witnessed in the fiscal environment of the nation. Why would anyone, person, persons, body or bodies disrupt the peace in an already settled matter?

Our Prayer

Distinguished Senate President, Principal Officers of the Senate, the Chairman, Senate Committee on Establishment and Public Service, Committee members and Distinguished Senators of the Federal Republic of Nigeria, TRI earnestly pray that:

1. All sections where the words “tax”, “taxation” and “tax professionals” appear in the Bil be expunged.
2. ICAN should be made to concentrate on regulating the accounting profession that it is currently doing and not be allowed by this August Assembly to create confusion, inefficiency and fragmentation in Tax practice by its proposed attempt to regulate the profession.

Thank you and God bless Nigeria.

Oluyide Olu-Lawal

Chief Operating Officer

Taxpayers Right Initiative