By Eti Best Herbert
Warning: Long read

I had the privilege to stumble on a report titled: “Pandora Papers: Inside Peter Obi’s secret businesses — and how he broke the law”. It was written by one Taiwo-Hassan Adebayo and published in Premium Times Newspaper on the 4th day of October, 2021.

Most Nigerians and indeed my humble self, had perceived Peter Obi to be an epitome of transparency, good governance, patriotism and economic astuteness. This perception heightened my curiosity to read through the article in order to discover the hidden secrets which the article had to bear against the former two term Governor of Anambra State and the vice-presidential candidate of the Peoples Democratic Party (PDP) in the 2019 general election. Having read through the article, my lawyerly self queried whether Peter Obi actually violated the law as alleged in the article. This prompted my decision to dispassionately test the allegations against Obi against the provisions of the law.

The allegations in the article basically border on allegations of tax evasion and non-declaration of certain jointly owned assets by Obi. It was argued that Obi committed the offence of tax evasion by establishing a company outside the shores of Nigeria in “havens where little or no taxes are paid”. It was further argued that Obi committed a crime by non-declaration of some of his jointly owned assets outside the shores of Nigeria and failure to resign from the board of directors of those companies 14 months after assuming the office of the governor in Anambra State. These allegations shall be addressed seriatim.

It must be stated there is a world of difference between allegation, facts and evidence. Allegations are mere claims and assertion of a person’s wrongdoing that are not yet proven. Facts are events that are confirmed or verifiable. While evidence are concrete facts used to support an assertion or a claim. At the moment, the claims of Adebayo against Obi are still within the realm of mere allegations. However, this article will proceed with the assumption without necessarily conceding that Adebayo’s claims against Obi are factual, as the said Obi still enjoys the presumption of innocence in his favour as protected by the Constitution of the Federal Republic of Nigeria. This presumption stands unshaken until otherwise proven.

A cursory look at Adebayo’s article would reveal that the author seems to have confused tax avoidance for tax evasion. It is appreciated that both terms may easily be mistaken one for another or erroneously used interchangeably except for persons who are well informed about tax laws. In simple terms, tax evasion is an offence, whereas tax avoidance is not an offence.

At this point, it must be stated that on the authority of Section 36 (12) of the Nigerian Constitution, a person shall not be held liable for an offence except such offence is expressly defined by a written law and a sentence specifically prescribed thereto. The case of George v. FRN (2015) All FWLR (Pt. 718) 879 is apt in this regard.

In Nigeria, tax evasion used in two sense. First, as a specific offence. Second, as generic expression for acts of tax non-compliance or violation of tax laws. Section 26 Value Added Tax Act 1993 and Section 164 Custom and Excise Management Act 1959 are the two known tax law provisions that specifically provide for tax offence. Every other tax offence including omitting or understating income in order to make incorrect return; failure to keep the required records; refusal or neglect to pay tax; dishonest declaration of income, earnings or assets; fraudulent tax returns, etc. are loosely referred to as tax offences.

However, the definition of the “tax evasion” in the two aforementioned tax law provisions has nothing to do with a business man deciding which part of the country to invest his legitimately earned money. It would be preposterous and despotic for any government to even prevent any entity from making such business decision, when the same government do solicit for foreigners to invest in the Nigerian economy. Why should a Nigerian be penalised for deciding to invest his resources in other countries irrespective of the prevailing tax rate in that country?

Indeed, the question to ask is: is there any Nigerian law that prohibits and penalises a Nigeria from investing in any jurisdiction outside Nigeria? Adebayo did not mention any. My guess is, he could not find any.

Business owners and entities ordinarily direct their business undertakings in such a way as to avoid financial liabilities including payment of tax. This is what is also known as tax planning. To quote Lord Clyde in the case of Ayrshire Pullman Motor Services and D. M. Ritchin v. Commissioner of Inland Revenue, (1920) 14 Tax Cas 754, 763–764: “No man in this country is under the smallest obligation moral or otherwise so to arrange his legal relations to his business or to his property as to enable the Inland Revenue to put the largest possible shovel into his stores. The Inland Revenue is not slow and quite rightly to take every advantage, which is open to it under the taxing statutes for the purpose of depleting the taxpayer’s pocket. And the taxpayer is in like manner entitled to be astute to prevent so far as he honestly can the depletion of his means by the revenue. Every company has the option of carrying out tax planning in order to minimize tax liability within the law of the territory in which it operates”.

There are tax avoidance schemes that is even recognized by tax laws. Individuals or companies may avoid payment of tax by simply increasing its capital expenditure in order to reduce its taxable profit. In this instance, the company would be said to be taken advantage of section 24 of the Company Income Tax Act (CITA) which includes certain capital expenditures as allowable deductions. This would be regarded as measures taken to reduce its tax liability. Provided such act is not prohibited by law, the company cannot be said to have committed any tax offence.

Provided that a particular scheme to avoid or reduce tax liabilities are not prohibited by law, they are still within the realm of tax avoidance and no criminal liability can accrue thereto. The best the government can do to address the incidence of tax evasion is to identify tax avoidance schemes and then get the legislature to criminalise it. Then again, the legislative enactment criminalising such act has effectively moved from tax avoidance into the realm of tax evasion. Until there is a law prohibiting a Nigerian from investing outside the shores of Nigeria, Peter Obi cannot be said to have committed the offence of tax evasion or any other tax offence(s), however so called.

On the issue of non-declaration of jointly or partly owned foreign asset: the law which addresses this subject is majorly the constitution and the Code of Conduct Bureau and Tribunal Act. Section 11 (1) (b) Part I Fifth Schedule to the Constitution Adebayo referred to requires a public officer to declare his properties, assets, and liabilities. The said provision did not specifically require the declaration of jointly or partly owned assets. It is appreciated that a public officer is required to declare his assets in view of the public trust reposed in the office they occupy. It would be irrational to expose assets that are partly owned by other individuals, when they are not the ones occupying the public office in question. Some business investors actually prefer to invest quietly, hence, a declaration of their jointly owned assets breach that business trust which they expect from their business partners. This otherwise could amount to a breach of the right to privacy and quiet enjoyment of the property of these individuals.

It is to be noted that Section 6 (b) of the Code of Conduct Bureau and Tribunal Act did not prohibit a public officer from holding an interest in a company. It only prevents the said public officer not to personally “engage or participate in the management or running of any private business, profession or trade”. To my mind, this does not preclude a public officer to shut down his hitherto existing business or profession simply upon his assumption of public office. It would be unreasonable for the law to expect that of such public officer. Provided the public officer is not personally involved in administering the business while in office, he is in the right side of the law. The appointment of nominee directors by companies are legitimate and well known corporate law practice recognised by the Companies and Allied Matters Act.

More so, Nigerian law recognises that companies have distinct personalities different from its shareholders and directors. As such, it is legally incorrect to say that a person owns a company.

Adebayo failed to tie down Obi’s personal involvement in the administration of the companies while occupying the office of the governor of Anambra State.

* Mr. Herbert, a legal practitioner and legal research consultant, writes from Ibadan, Oyo State
Lalasticlala seun mynd44 dominique

Source: ThisDay

CC: mace0lane
christistruth00
seunmsg
budaatum

He broke the law.. case closed.
This is the real reason Nigeria aint moving forward, we confuse ourselves with unnecessary grammar just to favor our favorites

[s]

Shetemi12:
He broke the law.. case closed.
This is the real reason Nigeria aint moving forward, we confuse ourselves with unnecessary grammar just to favor our favorites

[/s]

We'll rather hear from a learned lawyer like Mr. Herbert than a half-baked, uncouth, janjahweed Nairaland e-counsel riffraff like you.

Let ask my Lawyer madam, I will be back

Enemies at work. Obi remains one of the most outstanding politicians in Nigeria with exemplary proofs to prove it.
All these pull him down syndrome won't work. If Nigeria really wants to move forward, Obi remains a proven man for the job, tribalism aside.

It would be better for him to go to his favourite TV station AriseNews and defend himself there instead of the use of fictitious characters to launder his battered image. The Editor of Premium times was on air on AriseNews yesterday to defend his media's piece on Obi and he spoke eloquently well without fear or bias because a clear conscience fears no accusation. Peter Obi should go back to AriseNews and either deny or own up to his crimes instead of this cat and mouse games he is playing.

Lagos-ibadan express research consultant

The silent on dis obi matter eeh had it been it’s one APC chieftain or our Lagos big eyes brother nairalanders go deh open thread upon thread.

[s]

Cyberterror:
It would be better for him to go to his favourite TV station AriseNews and defend himself there instead of the use of fictitious characters to launder his battered image. The Editor of Premium times was on air on AriseNews yesterday to defend his media's piece on Obi and he spoke eloquently well without fear or bias because a clear conscience fears no accusation. Peter Obi should go back to AriseNews and either deny or own up to his crimes instead of this cat and mouse games he is playing.

[/s]

The editor of Premium Times is a journalist not a lawyer. He wants to sell newspapers.

If Obi is to be tried, lawyers will handle it not journalists & an erudite lawyer has just educated us that everything that Afonja muslim wrote on Obi is hogwash.


So until you can get us a lawyer who can counter this, all you & the Premium Times Editor have is noise to sell more newspapers.

rayvelez:
The silent on dis obi matter eeh had it been it’s one APC chieftain or our Lagos big eyes brother nairalanders go deh open thread upon thread.

Please mention one crime he committed or shut the hell up.

Afonjas are just desperately trying to find dirts to throw at anybody they perceive as a serious presidential material from the East. That's what this is all about. Nothing else! Their Tinubu is already full of dirt so like crabs in a bucket, they're desperately looking for company..

Peter Obi is the biggest criminal in Nigeria since 1999 after Atiku no wonder they wanted to come plunder Nigeria together. odili de learn work where this criminal dem

ThEGodFaThEr106:

Please mention one crime he committed or shut the hell up.

DoggoneDogg:
[s][/s]

The editor of Premium Times is a journalist not a lawyer. He wants to sell newspapers.

If Obi is to be tried, lawyers will handle it and not journalists & an erudite lawyer has just educated us that there is no case on Obi.



So until you can get us a lawyer who can counter this, all you & the Premium Times Editor have is noise to sell more newspapers.

Fictitious lawyer no one has heard of. Let him stake his career and go live on air on a national TV like AriseNews to defend the fraud Obi committed if so sure of the mess he is trying to justify. Until Obi comes out of hiding to defend his fraud, nobody will take him serious again. I am sure the leaders of PDP are so disappointed in this latest revelation about their poster boy

[s]

Cyberterror:


Fictitious lawyer no one has heard of. Let him stake his career and go live on air on a national TV like AriseNews to defend the fraud Obi committed if so sure of the mess he is trying to justify. Until Obi comes out of hiding to defend his fraud, nobody will take him serious again. I am sure the leaders of PDP are so disappointed in this latest revelation about their poster boy

[/s]

No one has heard of him but he just made the ThisDay editorial. Okay.

Mace0lane:
Peter Obi is the biggest criminal in Nigeria since 1999 after Atiku no wonder they wanted to come plunder Nigeria together.

Trash! Sensational headlines.

Many of your Igbos have gone mad.
You posted a news article from just one news outlets and you want us to believe what it said but I posted several newspaper outlet affirm indeed that Peter Obi is indeed a diahard criminal never witnessed by any state I. Nigeria you call it sensation.

Should the same rule not apply to your claim of pronouncing the fraudster a saint ?!

ThEGodFaThEr106:

Trash! Sensational headlines.

Lagos Ibadan bring him down syndrome. So many threads against obi has been moved to front page in an attempt to smear this innocent man. Nobody has seen this innocent man receiving bullion vans that contains billions on the eve of an election neither did he embezzle NEMA money nor did he receive 4bn from corrupt magu. He wasn't a former Chicago drug dealer. He didn't set up a company to swallow 10% of anambra igr. His daughter is not the iyaloja of any market in anambra. He doesn't have any thug loyal to him. His son neither control ads money in anambra nor any toll gate.

This is the type of man Nigeria needs. Frugal with resources and an accomplished industrialist and manager.
It is very unfortunate that fellow southerners who are Hawking southern unity like gala so as to blackmail the north on presidency are the Ines trying to bring him down

Noted

DoggoneDogg:
[s][/s]

No one has heard of him but he just made the ThisDay editorial. Okay.

For the right amount, anything can make it to a newspaper editorial. We were expecting a threat to sue if Obi thought he was being blackmailed or libelled. But same old attempt at crossdressing
The international community has taken note of everyone on that pandora papers, from Transparency International to UN agencies and financial institutions, all these ones you people are writing here and there is clutching at straws.

Mace0lane:
Many of your Igbos have gone mad.
You posted a news article from just one news outlets and you want us to believe what it said but I posted several newspaper outlet affirm indeed that Peter Obi is indeed a diahard criminal never witnessed by any state I. Nigeria you call it sensation.

Should the same rule not apply to your claim of pronouncing the fraudster a saint ?!

So it's on the pages of blogs and newspaper that one can be indicted for crime and fraud?
If this is what you can come out with to prove one is guilty mehn............your education is a waste.
I sorry sorry o.....,
I sorry for Nigeria........
I sorry sorry o.........
Egbami yo ho ho.........

ADEBAYO should have done more research before writing their usual Lagos-Ibadam junk articles of hate.
Obi hasn’t committed a crime, at least not yet but ADEBAYO from south west has already nailed him to the cross with his big hammer. O ma she oo

Mace0lane:
Many of your Igbos have gone mad.
You posted a news article from just one news outlets and you want us to believe what it said but I posted several newspaper outlet affirm indeed that Peter Obi is indeed a diahard criminal never witnessed by any state I. Nigeria you call it sensation.

Should the same rule not apply to your claim of pronouncing the fraudster a saint ?!

Obi is as much a criminal as most of your people in South West. It is foolhardy to point a finger to one politician in a part of the country which most of your people usually do while forgetting your own thieves.

About Igbos being mad, your people have become “more” mad.

DoggoneDogg:
By Eti Best Herbert
Warning: Long read


* Mr. Herbert, a legal practitioner and legal research consultant, writes from Ibadan, Oyo State
Lalasticlala seun mynd44 dominique

Source: ThisDay

Mr. Herbert- The Law. Well arranged piece.�. I am not a lawyer sir but how do you explain this part of the law that you quoted above:

"Subject to the provisions of this Constitution, every public officer shall within three months after the coming into force of this Code of Conduct or immediately after taking office and thereafter -

"(a) at the end of every four years; and
(b) at the end of his term of office, submit to the Code of Conduct Bureau a written declaration of all his properties, assets, and liabilities and those of his unmarried children under the age of eighteen years.".

Besides, it appears that you are more interested in displaying your knowledge about tax evasion and tax avoidance which was not mentioned in the law provisions than addressing the 'letter' of the law (you have a very good knowledge in that area I must commend). Perhaps, you could have added also 'creative accounting' to broaden our knowledge in that area. At least PMGG business name depicts creativity.

I guess as a lawyer, all arguments are geared towards a predetermined end. That's great �. It's part of the job but what I find odd is the claim of 'dispassionate' assessment of the Pandora paper's claims.

What happens to declaring his own part of the assets and liabilities in the company? The law says all his assets. Does the fact that the properties, asset and liabilities are co-owned make his own share not to be part of "all his property, assets and liabilities"?

For instance, if I have a share in a joint venture with Mr. A. Does that make my share in the venture not to be part of 'all my assets?


Are his children married at that point in time?

These are germane questions that we expect Mr. Herbert- the Law to answer and not a lecture on taxation and business management.