Are Private Car Parks Liable to Local Governments Levies? A Review of Airtel Networks Ltd v A.G. Lagos State

Description

ABSTRACT

Are Private Car Parks Liable to Local Governments Levies? A Review of Airtel Networks Ltd v A.G. Lagos State

Olagoke Odubunmi*

Conflict of jurisdiction to tax is one of the major areas of dispute in a federating state. Nigeria attempted to resolve the constant interplay of jurisdictional conflicts by the promulgation of the Taxes and Levies (Approved List for Collection) Act, 1998. In spite of the Act, conflicts of jurisdiction to tax has rather than abate, escalated. The case of Airtel v A.G. Lagos exemplifies the challenges of tax jurisdiction in a federating state. The paper reviews the case in details, the submission of the parties, the decision of the Court of Appeal and concludes that the court was in error as the powers of the local government to regulate motor parks as contemplated in the Constitution is restricted to the regulation of public motor parks, and does not extend to a private motor park.

Keywords: Taxes, Levies, Jurisdiction, Local Governments, Constitution.

INTRODUCTION
The conflict of jurisdiction to tax has often been one of the significant areas of dispute amongst the tiers of government in a federating state like Nigeria. The interplay of the jurisdictional powers of the federal, state and local governments often come to the fore in the construction, interpretation and application of constitutional provisions on the Exclusive, Concurrent and Residual Legislative Lists vis- a- vis the Taxes and Levies (Approved List for Collection) Act, 1998. Conflict arises in the interpretation of certain items in the respective legislative list capable of accommodation under the jurisdiction of more than one of the tiers.

Recently, the Court of Appeal considered one of such areas likely to brew misinterpretation and misapplication of the constitution, but unfortunately misinterpreted and misapplied the law when it pronounced on the extent of the powers of local governments to impose and collect motor park levies on motor parks owned and operated by private companies whose profits are liable to the companies income tax in the case of Airtel Networks Ltd v. A.G Lagos State & 2 Ors.₁

SUMMARY OF FACTS
The appellant is a telecommunications company providing mobile telephone and data services to its subscribers with a branch office at Banana Island, Ikoyi, Lagos. To facilitate the ease of parking for its staff and customers, the appellant developed a car parking lot for that purpose. A demand was made on the appellant by the 3rd respondent, the Eti-Osa Local Government, for it to pay parking permit charges in respect of said parking lot. The appellant contested the validity of the said demand and commenced proceedings by Originating Summons before the High Court of Lagos State in Suit No. ID/361M/2009: Celtel (Nig.) Ltd (Trading as Zain) (now Airtel Networks Ltd) v. Attorney-General of Lagos State & Ors₂; for the determination of questions about the legality of the demand for the payment of parking permit charges.

* LL.B, LL.M, (LASU) BL, ACTI. Manager, Tax Services, Maples & Temples, Lagos.

1. [2018] 1 CLRN 1; Appeal No. CA/L/311/2013. Court of Appeal delivered judgment on Wednesday 5th July 2017.
2. The Other 3 Defendants in the Suit are The Commissioner, Local Government and Chieftaincy Affairs Lagos State; Eti-Osa Local Government; Window-H Investments Limited.

THE GRAVITAS REVIEW OF BUSINESS & PROPERTY LAW VOL.9 NO.3