Appraising the Public Notices issued by the Lagos State Internal Revenue Service and the Joint Tax Board

Furthermore, employers of labour cannot be compelled to stop withdrawals of VPCs by their employees as the individual employee’s RSA is completely outside the control of the employer. At any rate, it would appear difficult for tax authorities to singlehandedly impose penalties for any deemed breach of the conditions for permissible withdrawals under Section 16 of the PRA (against any erring PFA or possibly against an employee under the CPS), without the involvement of the National Pension Commission ("PenCom"), the regulatory authority for the pension industry in Nigeria.

Concluding Remarks

The objectives of the Public Notices issued on withdrawal of VPCs by the tax authorities are clear and understandable. Simply, they aim at;

• Curbing the alleged abuse of the VPC scheme;

• Reducing the rate of tax avoidance among income earners and blocking revenue leakages for the government

• Achieving the overall purpose of adopting the CPS model of provident fund which is steady, stable and secure future savings; and

• Implementing the recently launched National Tax Policy (“NTP”).

As laudable as these objectives are, it is our opinion that enforcement of the Public Notices will face stiff challenges as to their legality or of steps proposed therein. We therefore advise the tax authorities to collaborate with other stakeholders towards initiating legislative reforms for streamlining the connected statutes such as the PRA, PITA and Labour Act and other relevant statutes with a view to providing the required legal framework for the current tax-revenue drive of the government and plugging any identified loopholes being utilized in tax avoidance schemes. This is certainly more expedient than embarking on a course of action that is likely to result in unending distractive litigation that is likely to trail any enforcement of compliance with the Public Notices and the attendant expenditure of time and resource.

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