Tax Crimes Prosecution - Principles, Procedures & Practical Insights into Courtroom Successes - Bidemi Daniel. Olumide (PPT)

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Tax Crimes Prosecution:

Principles, Procedure & Practical Insights

into Courtroom Successes

- Olumide, Bidemi Daniel

This project is funded by the European Union

Delivered at the United Nations Office on Drugs and Crime (UNODC)

Strategic Training on Corruption Crimes in Taxation on December 3, 2014

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Our Roadmap

1. Brief Overview of Tax Crimes:

Laws and Nature

2. A Run-through some Tax

Crimes

3. Essential Evidentiary Rules

4. Court room Successes -

Practical Insights

5. Case Study


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Laws and Nature of Tax Crimes

1.


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1. Laws and Nature of Tax Crimes:

Working Definition:

A crime or criminal offence is an act or

omission that a law defines or describes

as constituting a crime or offence and

provides a punishment for, and for which

the pronouncement/declaration of a

court of law is required.


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1. Laws and Nature of Tax

Crimes:

Relevant Principles:

1. Only the legislature, by way of a

law passed to that effect, can

legislate on how and what will

constitute a criminal offence. -

Section 36(12) of the 1999

Constitution.


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2. To constitute a crime, the prescribing

statute must expressly refer to the act

or omission as constituting an offence or

a crime or that it is punishable upon

conviction.


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3. A punishment must be statutorily

prescribed for the act or omission to

constitute an offence. The absence of a

punishment takes the act or omission

outside the scope of what we herein

refer to as criminal offences.


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4. Only a court of law can declare whether

an act or omission committed in a

particular circumstance constitutes a

crime and accordingly deserving of no

more than the statutorily provided

punishment.


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1. Laws and Nature of Tax

Crimes:

What is Tax Evasion:

Best described as a descriptive word

for acts that are calculated to evade or

get away from a lawful obligation to

subject oneself or ones economic

activities to the tax laws. It is at best a

collective noun for all the myriads of

tax crimes that feature in our tax laws.This project is funded by the European Union

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Some Tax Crimes under Nigerian Law

2.


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2. Some Tax Crimes under Nigerian Law:

Please refer to pages 4 to 23 of your text.


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Evidentiary Rules

3.


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3. Evidentiary Rules:

“It is essential for you to have a thorough knowledge of the law of evidence and

procedure, otherwise you will be handicapped at every turn by uncertainty as to

whether a piece of evidence is admissible, whether it has to be proved by oral

evidence, whether, if it is contained in a document, it is necessary to call the

maker of it and so forth. Much of this knowledge should and will become almost

instinctive, but it is, of course, necessary to have a thorough working knowledge of

even the more unusual points of evidence and procedure. The reason is that this is

the only branch of the law in which there is often no opportunity to research a

point, because it comes up unexpectedly and calls for an instant response. Take

as an obvious example, an issue as to whether a piece of evidence is or is not

hearsay; you have to object to it as it is about to be led. You must be able to

recognize it immediately as hearsay and to formulate your objection…” Judge

Michael Hyam: “Advocacy Skills” (1990; Blackstone Press Limited; Great Britain)

p. 10 to 11


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1. That a tax crime has been committed by the accused, must

be established by the prosecution, by proving all the acts,

omissions or intentions that constitute the crime (proof

beyond reasonable doubt) - Section 139(3)(b) of the

Evidence Act.

2. It is for the accused to prove the existence of any fact

which brings his case outside the ambit of the crime (as

legally defined) - Section 139(1) of the Evidence Act.


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3. Evidence shall only be given of relevant facts, provided they are not

remote in which case, a court can exclude such - Section 1 of the

Evidence Act.

4. Relevant facts are facts in issue, facts connected with the facts in issue, or

facts that cast doubt on the existence of facts in issue. It can be rightly

said that the central theme of the Evidence Act is an attempt at

providing as many instances of relevant facts as possible - Sections 4 to

13 of the Evidence Act.

5. “Facts in issue” refer to facts that need to be proved or disproved to

establish or defend a criminal allegation - Section 2 of the Evidence Act.


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6. Save for involuntary confessions, unlawfully obtained evidence are

generally admissible unless the court decides otherwise. The test for

such decision being whether the manner of obtaining the evidence

out-weighs the value of the evidence - Sections 14 and 15 of the

Evidence Act.

7. Confessions are generally admissible against the maker provided

they were made voluntarily. Involuntary confessions are confessions

made either on the threat or use of toture, inhuman or degrading

treatment or other forms of violence or by improper compulsion (in

a previous suit). Confessions obtained by deception on the accused

or otherwise given by the accused in an ignorant or drunken state

are not inadmissible involuntary confessions - Sections 28 to 32 of

the Evidence Act.


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8. A person who in a judicial proceeding gives account of

statements not made by him or of inadmissible documents

is said to be giving “hearsay” evidence. Hearsay

evidence is generally inadmissible except sanctioned by

the Evidence Act – See generally Sections 37 to 49 of the

Evidence Act on admissible hearsay evidence.

9. Though admissible, statements (including computer-

generated statements) that are largely inaccurate due to

time lag or the improper interests of the maker, will carry

little or no weight on the scale of justice - Section 34 of

the Evidence Act.


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10. Documentary evidence is at the heart of successful tax litigation.

The ability of the Prosecutor to successfully present the Court with all

the documentary evidence required to establish a tax crime is

arguably one of the highest hurdle to scale in successful tax litigation.

The rules on documentary evidence are a bit technical particularly for

the ‘proving’ party and have naturally become the stronghold for the

defence.

11. Documents are either public or private. Private documents are

documents which are not Public Documents. Public documents are

essentially documents that either proceed from or are in the custody

of any Government. Accordingly, private documents that are in the

custody of Government are Public Documents. - Sections 102 and 103

of the Evidence Act.


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11. All relevant documents (including computer-generated

documents) are admissible in their original (primary) or

other (secondary) form. While the first rule is that the

original document must be provided as proof of it and its

content, same documents or information contained therein

will only be admissible in other prescribed (secondary)

forms, if proper steps have been taken and reasonable

explanations provided on the reason for the unavailability

of the primary form of the document. One of such proper

steps is that a ‘notice to produce’ has been duly served on

a party (or his legal counsel) who is alleged to be in

possession or control of the primary version – Sections 83

to 97 of the Evidence Act


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12. Witnesses could also be key to the success of a case. All persons

are competent to testify unless the Court rules otherwise on grounds

of age, sickness or similar grounds. What is relevant is not the

number of witnesses but the quality of their testimony - Section 200

of the Evidence Act.

13. An accused can only, at his own election, testify in his case. He

cannot be compelled to do so - Sections 180(a) of the Evidence Act

and 36(11) of the 1999 Constitution.

14. Other than the accused who elects to testify, a Witness is not bound

to answer any question or produce any document which by so

doing, exposes his or herself or spouse to a criminal charge or

penalty (excluding civil liability).- Sections 183 and 184 of the

Evidence Act.


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15. Mastery of the skills of examination of Witnesses is a must for

Prosecutors. The Prosecutor should largely focus on establishing

his case through his Witnesses both by examination-in-chief and

re-examination. Cross-examination of the Defence Witnesses is

not a must. Do not cross-examine unless: (i) you consider that the

answers that you elicit from the Defence Witness will help your

case; or (ii) it is extremely important to discredit the Defence

Witness. The mother of all rules in cross-examination is never to

ask a question, the answer to which you are unsure of; you may

just be surprised! As much as possible use leading questions for

your entire cross-examination. Tame the Defence Witness to a

“yes” or “no” answer.


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Some Practical Insights into Courtroom

Successes

4.


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4. Some Practical Insights into

Courtroom Successes:

1. Always work as and in a team. The oft complexity of tax

crimes will require that each member of both the tax

investigation and prosecution sub-teams are looking at

different (yet complementing) aspects of the case. A team is

not a group of people; but rather a group of people with a

common objective and who for the sake of the common

objective perform different yet complementing activities. In a

team “activities” are always sacrificed on the altar of the

“common objective”.


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4. Some Practical Insights into Courtroom Successes:

2. It is highly recommended that the investigation and probable prosecution

functions of a tax case be “projectized”. For this purpose, I will refer to all the

work involved in the entire tax investigation and prosecution process as “Work”.

a. Properly initiate or consciously decide how Work should be initiated. Is a

formal report required, for example, from the Tax Audit Department or

other Government Agency?

b. Plan for how Work will be executed. Be SMART. Set out with the scope of

the Work firmly understood by the team.

c. Execute the Work according to the plan.

d. Be able to monitor and control the process for the execution of the work

such that, where appropriate, the Work plan can be revised and thereafter

the Work should be executed according to the revised Work plan


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e. Always close out each Work with a final Report. The final outcome will not

always be convictions; but even in the failure of a obtaining a conviction,

there are lessons to be learned. Document this and find a way of sharing

the knowledge with the organisation. Failure does not hurt as bad as

avoidable failures.

f. Money is also a scarce resource for Government. Work within a budget. Tax

investigation and prosecution comes with their financial costs (aside from the

free filing cost). Experts and other knowledgeable witnesses or advisers

may often have to be paid for their time. Trips have to be made,

g. Time is expensive. Set out realistic time to completion or schedule for each

and all functions.

h. Have a very efficient semi-formal process of communication between team

members. A more formal process of communication can be maintained with

other stakeholders, organizational bosses, the media etc.


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3. An excellent tax investigation process (from the commencement of

the process to the conclusion of the final investigation report) is the

foundation of desirable Courtroom outcomes. It is the tax

investigation report that determines whether or not a tax crime

should be prosecuted.

4. The Prosecutor should be a central part (if not the leader) of the

tax investigation team. He knows what the Court requires and it is

he who sees and knows what it is that he is looking for.

5. Even after the instruction/preferment of the tax crime case, the tax

investigation sub-team should still be on a standby mode to assist

with the review (or further investigation) of any new and un-

envisaged evidence provided by the defense.


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6. There is no substitute for hard (spelt “smart”) work in the ‘science’ of

litigation. Starting from the charge sheet or information to be

preferred and filed in Court to the final submissions (written and or

oral) to be filed and or made, the Prosecutor must be diligent

enough to pay attention to every detail of the case.

7. The “copy and paste” method of work (in the advent of most

professionals having to personally do their type-settings) should be

highly discouraged. Even if similar texts have to be copied and

pasted, the prosecution sub-team, prior to filing any process in

Court, should have the discipline to “all” read such process at least

two times over, to ensure against all of context, typographical or

syntax errors. Well prepared and presented paper work, to an

extent, demonstrates the tidiness of the mind(s) of its authors.


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8. “It is necessary to prepare your case by taking a general and

specific view of it so that you have clear in your mind not only what

you have to prove or disprove, but also the way in which you are

going to do it.” - Judge Hyam: “Advocacy Skills” (1990; Blackstone

Press Limited; Great Britain) p. 10.

9. That the Prosecutor must have the keen presence of mind in the

Courtroom is no understatement or gain-saying; it is vital for

success. Great attention must be paid to both the nuances or other

emotional out-plays of the Judge most importantly and the

Defence secondarily. The Prosecutor must be sensitive enough to

know when he is losing or about losing the interest of the judge; he

must be intelligent enough to quickly take hints provided by the

Bench and make amends where necessary. A Prosecutor with a

wandering mind cannot afford these luxuries.This project is funded by the European Union

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10. A successful Prosecutor must set out to win the war

(the conviction) and not every battle (the relatively

inconsequential technical arguments) in the Courtroom.

A good sense of logic and appreciation of the

relevant parts of the case are essential. It allows the

Prosecutor focus on and work at the big picture rather

than the oft time-consuming and relatively

inconsequential technical arguments the Defence will

always throw-up. The logic of the case lies in: (i) what

needs to be proved; (ii) any other law or facts of the

case that matters to the Judge.


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11. To the extent that tax cases often come with a large dose of

documentary evidence, the Prosecutor must devise a means of

presenting these evidence to the Court in a manner that is quite

easy to understand and follow. The due pagination of files and

their contents cannot be overstated. Using bookmarkers or page

dividers to appropriately segment an avalanche of papers will

prove a wise move.

12. The use of ‘well-tutored’ experts to tell the story of the

documents or other evidence is key. Most Judges require the

perspective of an expert in order to make up their minds on

complicated evidence. The Prosecutor must use this well in a well

ordered performance – the expert is the orchestra, the

Prosecutor - the conductor, and the Judge - the audience.


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13. Just as using an expert can build your case, so also can the

Defence’s expert crack the building. The first rule is to focus on

your expert and ensure that a good job has been done both at

examination-in-chief and re-examination. The second is to

seriously decide whether or not to cross-examine the Defence

expert. I agree with Judge Hyam to the extent that your

objective in cross-examining an expert are any of or both of (i)

discrediting him; and or (ii) cause him to admit the existence of

alternative credible interpretation (your expert’s opinion).


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Case Study

5.


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CASE STUDY


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