From Assessment to Adjudication – Practical Guidance on Tax Objections, Appeals and Resolution Procedures
Alternative Dispute Resolution and Settlement
One of the significant innovations under the 2025 framework is the express recognition of amicable settlement mechanisms.
Section 141 of the NTAA allows taxpayers and tax authorities to resolve disputes amicably at any stage.
Settlement may occur where:
- Litigation costs outweigh benefits;
- Public revenue interests are protected;
- Certain taxpayers accept the authority’s position;
- Policy considerations justify compromise.
Advantages of Settlement
Settlement may:
- Reduce penalties;
- Minimise reputational damage;
- Preserve business relationships;
- Accelerate dispute closure;
- Reduce legal costs.
Risks
However, poorly negotiated settlements may:
- Create future audit exposure;
- Trigger industry-wide reviews;
- Affect transfer pricing positions;
- Result in unintended admissions.
Settlement agreements should therefore be carefully documented.
Judicial Review and Appeals to Higher Courts
Decisions of the TAT may be challenged before the Federal High Court on questions of law.
Further appeals may proceed to:
- The Court of Appeal;
- The Supreme Court.
Given the evolving nature of the 2025 reforms, Nigerian appellate courts are likely to play a significant role in clarifying:
- Constitutional tax powers;
- Administrative fairness;
- Due process requirements;
- Jurisdictional conflicts;
- Enforcement boundaries.