A company disputes a charge and its lawyer says the Act is silent, but an old English judgment uses the same words. A taxpayer in the north asks whether the zakkat he pays counts for tax. A bank cites an FIRS circular that seems to contradict the statute. Which source of law wins, and which does a Nigerian court actually follow?
The exam sets this as a short list question (usually five sources, one mark each), so each source must be named and explained in a sentence with an example.
This topic covers the sources of Nigerian tax law: statutes, case law, customary law, circulars and the practice of the revenue, the opinion of experts, budgets and ministerial pronouncements, and the Constitution. It also shows how the 2025 tax laws change the list of statutes. The previous topic covered types of taxes and tax systems. The next covers the tax authorities and their powers.
In 30 seconds
Sources: (1) statute law, (2) case law (judicial precedent), (3) customary and Islamic law, (4) circulars and the practice of the revenue, (5) opinions of tax experts and authors, (6) budgets and ministerial pronouncements, (7) the Constitution. Nigeria taxes by statute, not by common law. Case law binds lower courts, and English decisions may be used where the words are substantially the same (Aderawos Timbers v FIRSB).
Customary examples: ishakole, osusu-nkwu, zakkat. Exam law: for periods ending before 1 January 2026, name CITA, PITA, VATA, the Finance Acts and the Petroleum Industry Act 2021; from 2026, name the Nigeria Tax Act 2025 and the Nigeria Tax Administration Act 2025.
Key terms in plain English
| Term | What it means |
|---|---|
| Statute | A law passed by the National Assembly or a State House of Assembly, which gives a tax authority its power to charge tax |
| Case law | The decisions of superior courts on how a tax law is read; lower courts must follow them |
| Stare decisis | The rule that earlier decisions of higher courts bind later courts |
| Customary law | Native law and custom on the taxation of income, goods and property within a community |
| Circular | A written statement by the revenue authority on how it will apply the law |
| Subsidiary legislation | Regulations made under an Act, such as the 2024 withholding tax regulations |
| Tax treaty | An agreement between countries to avoid double taxation and to share information |
Syllabus check
This topic is in syllabus area A, introduction to taxation, tax administration and ethics (20% of marks). It covers:
- the main sources of Nigerian tax law;
- statutes, case law, customary law, circulars and the Constitution;
- the effect of the 2025 laws on the list of statutes.
CAMA 2020 and the sources of tax law
The Companies and Allied Matters Act 2020 (CAMA 2020) is the company law of Nigeria. The sections below apply to this topic.
| Section | What it says | Link to this topic |
|---|---|---|
| s. 377(1) and s. 378 | Directors prepare financial statements that give a true and fair view | The accounts are prepared under company law, but the tax statutes decide what is taxed, so a profit in the accounts is adjusted before it is taxed |
| s. 305 and s. 308 | Directors must act in good faith and with the care, diligence and skill of a prudent director | Directors cannot plead ignorance of the tax statutes; they must keep the company within them |
The rules in more depth
Sources of Nigerian tax law
The tax system in Nigeria is run through statutes rather than common law. The sources are these.
| Source | What it is | Examples |
|---|---|---|
| Statute law | Acts of the National Assembly and State Houses of Assembly, bye-laws of local governments and, under military rule, decrees and edicts. They give the tax authorities the power to charge tax on individuals, companies, trusts and settlements | Companies Income Tax Act, Personal Income Tax Act, Value Added Tax Act, Petroleum Industry Act 2021 and the Finance Acts (all for periods before 2026); the Nigeria Tax Act 2025 from 2026 |
| Case law | Decisions of the High Courts, the Court of Appeal and the Supreme Court on how a tax statute is read. They bind the lower courts under the doctrine of stare decisis | Aderawos Timbers Trading Co. Ltd v Federal Board of Inland Revenue (1966) |
| Customary law | Native law and custom on the taxation of income, goods and property of persons or communities in an ethnic group, including Islamic law in the north | Ishakole (Yoruba land, paid to the oba on farm produce); osusu-nkwu (eastern Nigeria); zakkat (paid by Muslims on wealth held for a full year) |
| Circulars and practice of the revenue | Written statements on how the authority will apply the law, and its settled way of working | FIRS circulars on stamp duty and on VAT |
| Opinions of experts and authors | Writings that the courts take judicial notice of | Textbooks and journal articles |
| Budgets and ministerial pronouncements | Policy announced each year that is later put into law | Budget speech changes to rates and exemptions |
| The Constitution | It divides taxing powers between the Federal, State and Local Governments and requires citizens to declare income truthfully and pay tax promptly (section 24(f)) | The Exclusive and Concurrent Legislative Lists |
How case law is used
Nigerian tax law came from English law, so English decisions on similar words are persuasive. In Aderawos Timbers v FIRSB the court held that English decisions can be used to interpret Nigerian tax statutes where the words used are similar and substantially the same as the English ones. A decision of a superior Nigerian court on a point of principle is binding on the lower courts.
Weight of each source
- A statute beats a circular. A circular states the authority’s view, not the law, and a court will follow the Act where the two differ.
- A superior court decision binds lower courts, but a later statute can change the rule.
- Customary law sets taxes within communities, but it is separate from the statutes that the revenue authorities enforce.
What changed in 2025
The President signed four laws on 26 June 2025: the Nigeria Tax Act, the Nigeria Tax Administration Act, the Nigeria Revenue Service (Establishment) Act and the Joint Revenue Board of Nigeria (Establishment) Act. The Nigeria Tax Act and the Nigeria Tax Administration Act took effect on 1 January 2026.
The Nigeria Tax Act replaces the Companies Income Tax Act, the Personal Income Tax Act, the Capital Gains Tax Act and several levy laws, and now contains the VAT and stamp duty rules. The Nigeria Revenue Service replaces the FIRS. The Petroleum Industry Act 2021 continues for petroleum taxes, read with the Nigeria Tax Act. Regulations made under the Acts, and tax treaties, are further sources of law.
Which law the answer should name
The accounting period decides. A basis period that ended before 1 January 2026 is assessed under the old statutes, even when the return is filed in 2026. A period that ends on or after 1 January 2026 falls under the Nigeria Tax Act 2025. The Pathfinder marking guides up to 2025 list the old statutes as the statute sources.
Worked examples
Example 1: name the source. (a) A firm uses an English judgment to interpret a Nigerian tax section with the same words. (b) A farmer pays zakkat on his wealth. (c) The FIRS issues an information circular on stamp duty.
- (a) Case law: Aderawos Timbers allows English decisions on substantially the same words.
- (b) Customary (Islamic) law: zakkat is paid on wealth held for a full year.
- (c) Circular and practice of the revenue: it states how the authority applies the law but is not itself the statute.
Example 2: circular against statute. A circular says a payment is taxable, but the Act exempts it.
- A circular is not law. It states the authority’s view.
- The Act prevails, so the taxpayer is entitled to rely on the exemption.
- The taxpayer may object and, if refused, appeal to the Tax Appeal Tribunal.
Example 3: pick the statute. A company with a year ended 30 September 2025 and another company with a year ended 31 December 2026 each ask which law applies.
- The first period ended before 1 January 2026, so the old statutes apply.
- The second period ends after 1 January 2026, so the Nigeria Tax Act 2025 applies.
- The filing date does not matter.
How to score full marks
- Name five sources at least, one mark each, and add a phrase and an example to each.
- Give the real examples: the statutes by name, ishakole, osusu-nkwu and zakkat, and Aderawos Timbers.
- State that Nigeria taxes by statute, not common law.
- Add the period rule when the question mentions a year, so that the examiner sees you know which law applies.
Common mistakes in the exam
- Listing statutes only, and forgetting case law, customary law and circulars.
- Calling a circular a statute.
- Naming the Nigeria Tax Act for a period that ended in 2025 or earlier.
- Omitting the case or the customary examples that earn the mark.
Quick revision
- Seven sources: statute, case law, customary law, circulars, expert opinion, budgets, Constitution.
- Statute beats circular. Superior courts bind lower courts.
- Customary: ishakole, osusu-nkwu, zakkat.
- Case: Aderawos Timbers v FIRSB.
- 2025 laws: NTA, NTAA, NRS Act, JRB Act; the NTA and NTAA took effect on 1 January 2026.
Practice questions
Questions 1 to 10 are multiple choice. Questions 11 to 13 are written. Try each before opening the answer.
Question 1. Nigerian tax law is mainly found in:
- Common law
- Statutes
- Customary law only
- Circulars only
Show the answer
B. Nigeria taxes by statute. Other sources support or interpret the statutes.
Question 2. The doctrine under which superior court decisions bind lower courts is:
- Stare decisis
- Res judicata
- Ultra vires
- Force majeure
Show the answer
A. Stare decisis means judicial precedent: High Court, Court of Appeal and Supreme Court decisions bind the courts below them.
Question 3. Ishakole is a tax paid in:
- Eastern Nigeria on farm produce
- Yoruba land, to titular heads on farm produce
- Northern Nigeria on wealth
- Lagos on property
Show the answer
B. Ishakole is paid in Yoruba land to titular heads of communities or obas on the produce of farmland.
Question 4. Zakkat is payable on wealth that has been held for:
- One month
- Six months
- A full year
- Five years
Show the answer
C. Zakkat is paid by adherents of the Islamic faith on wealth held for a full year.
Question 5. In Aderawos Timbers v FIRSB, the court held that:
- English decisions have no use in Nigeria
- English decisions can be used where the words are substantially the same
- Only Supreme Court decisions count
- Circulars override statutes
Show the answer
B. English decisions may be invoked to interpret Nigerian tax statutes where the expressions are similar and substantially the same.
Question 6. Where a circular conflicts with an Act, which prevails?
- The circular
- The Act
- Whichever is later
- The tax authority’s choice
Show the answer
B. A circular is the authority’s view. The statute is the law and prevails.
Question 7. A company has an accounting period ended 30 June 2025. The law that applies is:
- Nigeria Tax Act 2025
- The old statutes (CITA and the Finance Acts)
- Neither
- Whichever the company chooses
Show the answer
B. The period ended before 1 January 2026, so the old statutes govern, even if the return is filed in 2026.
Question 8. Which law replaces the Companies Income Tax Act for periods from 2026?
- Nigeria Tax Act 2025
- Finance Act 2019
- Petroleum Industry Act 2021
- Stamp Duties Act
Show the answer
A. The Nigeria Tax Act replaces CITA, PITA, the Capital Gains Tax Act and several levy laws, effective 1 January 2026.
Question 9. Section 24(f) of the Constitution requires citizens to:
- Pay tax only on request
- Declare income truthfully and pay tax promptly
- Register for VAT
- Keep records for six years
Show the answer
B. It is among the duties of a citizen: to declare income truthfully to the appropriate agencies and pay tax promptly.
Question 10. Which of these is NOT a recognised source of Nigerian tax law?
- Budget pronouncements
- Opinions of tax authors
- Foreign legislation as such
- Circulars of the revenue authority
Show the answer
C. Foreign legislation is not a source in itself. English judicial decisions may be used as guidance where the words are the same.
Question 11 (10 marks). State and explain five sources of Nigerian tax law.
Question 12 (10 marks). (a) Explain what case law is and how English decisions are used in Nigerian tax cases. (5 marks) (b) Give three examples of taxes under customary law. (5 marks)
Question 13 (10 marks). (a) List the four tax laws signed in June 2025. (4 marks) (b) State the rule that decides whether the old or the new law applies. (3 marks) (c) Say what replaces the FIRS. (3 marks)
Model answers
Show the model answer to Question 11
Any five, 2 marks each (1 for the name and 1 for the explanation or example).
- Statute law: Acts and bye-laws that give authorities power to tax, such as CITA, PITA, VATA and the Finance Acts (and the Nigeria Tax Act 2025 from 2026).
- Case law: decisions of superior courts that bind lower courts, such as Aderawos Timbers v FIRSB.
- Customary law: native and Islamic law, such as ishakole, osusu-nkwu and zakkat.
- Circulars and practice of the revenue: the authority’s statements on how it applies the law.
- Opinions of experts and authors: writings the courts take notice of.
- Budgets and ministerial pronouncements: policy later put into law.
- The Constitution: it divides taxing powers between the three tiers of government.
Show the model answer to Question 12
(a) Case law (5 marks). Case law is the body of judgments of superior courts on how tax statutes are read. (1) Under stare decisis, judgments of the High Courts, Court of Appeal and Supreme Court are binding on the lower courts.
(2) Because Nigerian tax law derives from English law, English decisions may be invoked where the words in the Nigerian statute are substantially the same as in the English statute, as held in Aderawos Timbers v FIRSB. (2)
(b) Customary taxes (5 marks). Ishakole, paid in Yoruba land to titular heads on the produce of farmland; (2) osusu-nkwu, applicable in the east; (1) zakkat, paid by Muslims on wealth held for a full year. (2)
Show the model answer to Question 13
(a) Four laws (4 marks). The Nigeria Tax Act; the Nigeria Tax Administration Act; the Nigeria Revenue Service (Establishment) Act; the Joint Revenue Board of Nigeria (Establishment) Act. (1 each)
(b) Rule (3 marks). The accounting period decides, not the filing date. (1) A period that ended before 1 January 2026 is assessed under the old laws. (1) A period ending on or after 1 January 2026 is assessed under the Nigeria Tax Act 2025. (1)
(c) Replacement (3 marks). The Nigeria Revenue Service replaces the Federal Inland Revenue Service (2) and has a wider mandate to collect tax and non-tax revenue. (1)
Pathfinder on Statutes, case law, customary law, circulars, budgets and the Constitution as sources of tax law
These are the ICAN Pathfinder questions that test this topic. ICAN owns the questions and the suggested solutions, so we point you to them and do not copy them. Open your Pathfinder, attempt each question under exam conditions, then check your answer against the notes above.
Revise first: Sources of Nigerian tax law
Revise first: Sources of Nigerian tax law
Revise first: Sources of Nigerian tax law
Source: ICAN Pathfinder, Taxation. Diets covered: May Diet, 2026 and May Diet, 2024.
Spotted a mistake? Tell us and we will check it.
