Remember Lot's Wife: Interpretation of Tax Statutes

Abstract

The common law has over several centuries developed rules of or guides to statutory interpretation. These rules are usually referred to as canons of statutory construction or canons of statutory interpretation. Although tax statutes are (allegedly?) a special breed of legislation, they are nevertheless statutes, and it is submitted here that the canons of statutory interpretation may be employed freely in the interpretation of tax statutes, almost, though not quite, as much as they are used in statutory interpretation generally. In the evolution of the canons of statutory construction, tax statutes have not been exempted from their beam. On the other hand, the received professional wisdom on tax statutory interpretation is that most of the canons are not suitable for construing this elite category of legislation. Indeed, going by some of the most eminent authorities, the Strict Constructionist Approach and the Literal Rule appear to be the only permissible guides to construing tax statutes. Lawyers love certainty of doctrine and precedent along with predictability of their application. They adopt a worshipful backward gaze at rigid precedent and stiffen their necks in the process. They are like Lot’s wife, who, having looked back, was turned into a pillar of salt , rigid and unyielding, unable to glance forward. Tax lawyers love to invoke Cape Brandy and Duke of Westminster, and then fold their arms, gleefully expecting a judicial “Amen!” to whatever fossilised jurisprudence they have uttered. Well, “nothing is certain except death and taxes” including the death of doctrines about the interpretation of taxes. International, or more precisely foreign, tax jurisprudence has hitherto guided the understanding of tax statutory interpretation among the legal community in Nigeria. Our regular courts, including even the Supreme Court, have contributed very little to tax law jurisprudence, and even less to tax statute interpretation. They have tended to feebly copy and paste Cape Brandy and Duke of Westminster. Cape Brandy and Duke of Westminster are no longer gospel truth. The simple, unvarnished truth is that our courts are scarcely learned in tax law. They take their guidance wherever they can find it- until now, from outside. With the advent of the new tax regime and the inauguration of the tax appeal tribunals, our courts can now look inward, even if downward, for inspiration on the growth of our tax jurisprudence especially as regards tax statutory interpretation. In this paper I essentially submit the proposition for your consideration that while taxes may be certain, their interpretive philosophy is not as settled as tax lawyers have been led to assume or would like to think. The paper therefore muddles the waters that you thought had long been calmed, in order to throw up the pebbles and coral reefs of discord entangled beneath, for possible disentanglement. The tax appeal tribunals, being specialist albeit inferior administrative tribunals, can lead the development of tax law jurisprudence. Appeals to the Federal High Court and thence higher up should provide the legal system with ample opportunities as sharpening the contours of our tax law, particularly in the matter of interpretation.