Justice Hakeem Oshodi of the Lagos State High Court has called for the activation and full utilisation of designated revenue courts to prosecute tax-related offences in the state.
Oshodi made the call at the Revenue Recovery Summit organised by the Lagos State Ministry of Justice, held recently at the Radisson Blu Hotel, Ikeja.
Speaking at the event, the judge lamented the underuse of revenue courts, noting that many tax defaulters prefer to settle out of court to avoid prosecution.
“I currently sit as a judge in a revenue criminal court, and I must confess, I have not conducted any trials. Yet, I’m fully ready to work,” Oshodi said.
“What we observe is that once defaulting taxpayers are caught, they quickly settle because they don’t want to risk going to jail,” he added.
The summit, themed ‘Speedy Dispensation of Revenue Cases in Court’, focused on strengthening tax enforcement mechanisms and fostering collaboration between the judiciary and government agencies.
Citing South Africa’s aggressive stance on high-profile tax defaulters, Oshodi urged Nigerian authorities to adopt a firmer approach to tax collection.
He also stressed the need for greater synergy between the judiciary and the executive in enforcing tax laws.
“In South Africa, tax evaders are presumed guilty until they prove otherwise,” he noted.
Officials from the Lagos State Ministry of Justice and the Lagos Internal Revenue Service at the summit affirmed their commitment to reviving enforcement models adopted by previous administrations.
In his keynote address, Lagos State Attorney-General and Commissioner for Justice, Mr. Lawal Pedro (SAN), stressed the need to reform the process of resolving revenue disputes.
Pedro highlighted the adverse impact of delayed revenue on service delivery in critical sectors such as education, healthcare, infrastructure, and security.
“When revenue is delayed or trapped in legal bottlenecks, it is the ordinary people who suffer,” he said.
He cited recent improvements, including the Commercial Courts Complex in Tapa, which now hosts revenue courts, as well as provisions under the Lagos State High Court (Civil Procedure) Rules, 2019.
Pedro also referenced new enforcement powers granted under the Tax Administration Act, 2025, adding, “We have the tools. What we need is the will to use them effectively.”
Also speaking, a former Lagos Attorney-General and ex-Deputy Chief of Staff to the President, Mr. Ade Ipaye, stressed the importance of strategic case selection and practical collaboration among stakeholders.
“You want revenue recovery for the state. If you sue a shadowy figure who won’t appear in court, you are merely wasting judicial time,” Ipaye said.
He called for performance-driven strategies, urging regular internal reviews with counsel and open lines of communication with the judiciary.
“The ultimate goal is recovery, not litigation for its own sake. If a defendant wants to settle, why not? That takes the case off the docket and achieves the objective faster,” he added.
Ipaye also delved into the legislative history of the Lagos State Revenue Administration Law, enacted to address flaws in the earlier tax framework.
He recalled that in 2006, Lagos State challenged the federal framework established by the Personal Income Tax Act, arguing that it was unconstitutional for the federal government to set up a state revenue board.
As a result, the state enacted its revenue service law, asserting greater autonomy over tax administration.
“Lagos argued that PITA overstepped its bounds by creating state revenue boards, a responsibility that rightly belongs to state legislatures,” he said.
“Consequently, Lagos enacted its law to re-establish the Lagos State Internal Revenue Service.”
However, Ipaye explained that the introduction of the Tax Appeal Tribunal in 2007 shifted dispute resolution to a federal body, complicating jurisdiction.
“Taxation is a specialised area. The complexity of tax disputes, particularly when they involve facts and figures, makes them unsuitable for direct court intervention.
“In many jurisdictions, tax disputes are resolved administratively first. But in Nigeria, the TAT’s creation raised constitutional questions,” he noted.
Ipaye explained that while Lagos State’s law initially mirrored PITA’s dispute resolution procedures, the introduction of the TAT sparked confusion over jurisdiction.
“The tribunal, created by a federal law, now handles appeals previously within the state’s purview,” he said.
He also cited provisions in the Lagos State Revenue Administration Law aligning it with PITA, noting the state’s acceptance of PITA’s supremacy due to its place on the exclusive legislative list.
“Despite our push for greater autonomy, we are bound to follow the federal framework where conflicts arise,” he said.
Ipaye recalled the scrapped Value Added Tax Tribunal, struck down by the courts for overstepping federal court jurisdiction, warning that the TAT could face similar constitutional challenges.
“The VAT tribunal’s collapse set a precedent. The TAT cannot avoid similar legal scrutiny,” he warned.
He noted that Section 272 of the 1999 Constitution grants state high courts jurisdiction over civil proceedings involving rights and obligations, except where Section 251 vests such powers in the Federal High Court.
“Section 251 gives the Federal High Court jurisdiction over federal revenue matters or where the federal government is a party. But personal income tax collected by Lagos belongs to the state, not the federal government,” Ipaye argued.
He added that while the National Assembly can legislate for the Federal High Court on matters within the exclusive list, it remains debatable whether this extends federal jurisdiction over state tax revenues.
Ipaye also raised concerns over the design of the TAT under PITA.
He said, “Sections such as Section 60 and Paragraphs 13 and 14 of the Fifth Schedule define ‘the Service’ solely as the Federal Inland Revenue Service. The law seems to envisage only the FIRS utilising the TAT, despite some ambiguous provisions.”
He recalled attempts by the FIRS to take over personal income tax collection, which the states successfully resisted.
“Though states pushed back, the law now allows them to authorise the National Revenue Service to collect their taxes, a controversial arrangement in a federation,” he said.
Ipaye also faulted some states for failing to establish independent Boards of Internal Revenue, instead relying on private consultants for tax collection.
“This leaves many states vulnerable and ill-equipped for complex tax administration and dispute resolution,” he said.
He warned that until the Supreme Court delivers a definitive verdict, jurisdictional ambiguity over tax disputes will persist, posing risks to both state governments and taxpayers.
“For now, if the tax due is uncontested, state courts and magistrates remain the proper channels for enforcement,” he said.
Ipaye cautioned that once an appeal enters the TAT process, parties must brace for potential complications regarding enforcement and appellate rights.
Earlier, in his welcome address, the Solicitor-General and Permanent Secretary of the Lagos State Ministry of Justice, Mr. Hameed Oyenuga, urged stakeholders to work together to expedite the legal process for resolving revenue cases.
He described the summit as a vital platform for advancing fiscal governance and boosting revenue generation.
“This summit provides a critical opportunity for collective reflection and strategic engagement on efficient and lawful revenue generation and recovery,” Oyenuga said.
He stressed that sustainable revenue remains the foundation of effective governance.
“No state can meet its citizens’ expectations without a strong, reliable revenue system,” he added.
Oyenuga explained that the summit aimed to deepen collaboration between legal and fiscal institutions to improve tax compliance, enforcement, and recovery in line with the law.
He noted that the summit’s theme reflected the urgent need to address legal delays that hinder governance.
Also speaking, a member of the Lagos State House of Assembly, Mr. Saheed Obafemi, called for urgent reforms to expedite revenue cases in the judiciary.
Obafemi, who represents Kosofe Constituency II and serves on the House Committee on Finance, stressed that effective revenue adjudication is critical to sustaining public services.
“Lagos is Nigeria’s economic hub. That’s not in doubt. Yet, our biggest challenge remains sustaining development, and the answer lies in revenue,” Obafemi said.
He noted that public services such as education, healthcare, transportation, sanitation, and justice rely heavily on government revenue.
“When revenue is delayed or trapped, it’s the ordinary people who suffer,” he said.
Obafemi praised initiatives by the state government to enhance revenue enforcement, including the Tapa Commercial Court Complex, the establishment of a revenue recovery unit in the Ministry of Justice, and reforms under the Lagos High Court (Civil Procedure) Rules 2019.
He also cited federal legislation, such as the Tax Administration Act 2023, which provides new tools for tax enforcement.
“We have the tools. What we need now is the will to apply them effectively for the benefit of the people,” he said.
The lawmaker urged that all revenue-related cases be prioritised to avoid delays that could stall governance.
He called on judges, lawyers, and other stakeholders to partner with the government by adopting reforms that will streamline case handling and speed up resolutions.
“This summit is about bringing judges and legal stakeholders into the core of state revenue policies as strategic partners,” he said.
“We need your input—your experiences and advice—on how to make these cases run more efficiently.”
Obafemi tasked participants with making actionable recommendations to help Lagos build a revenue adjudication system that is “fast, fair, and secure.”
The summit concluded with goodwill messages and a pledge of stronger collaboration, as stakeholders expressed optimism about the state’s readiness to intensify its crackdown on tax evasion through stronger judicial-executive cooperation.
