LIMITATIONS TO TRADE UNIONS’ USE OF REPRESENTATIVE ACTION TO INTERVENE IN TAX LITIGATION FOR TAX LIABILITIES OF ITS MEMBERS: A LEGAL APPRAISAL

Abstract

An action based on tax assessment under Pay-As -You -Earn (PAYE) Scheme cannot be maintained in a representative capacity. This is the reason for the resistance to every move as a group to challenge a tax assessment by the relevant tax authority. Trade Unions have always relied on the omnibus consent and authority of members implied in their membership, to represent them in tax matters. They have always shown in its insistence that PAYE tax matters are matters relating to and connected to the welfare of workers who are members. They allege that it is part of the mandate of a trade union to stand in on behalf of persons so affected who are members, whether it is procedurally permitted or not. PAYE scheme is a tax scheme through which employees are assessed, re-assessed and demand notice sent to them and where the employers fail to remit their tax indebtedness litigation to recover same by the tax authority will be the next option. Doctrinal method of data collection was adopted using analytical approach to review the various tax statues, decisions of courts, opinion of experts and journal and internet materials on the subject matter. The work revealed that liability to tax arises only upon an earned income of an individual tax payer. An assessment or re-assessment of tax liability for all employees could not be made in a common exercise by the tax authority. The salaries of workers are not from a common fund liable to income tax en bloc. It is recommended that each and every employee has a separate and distinct cause of action which could not be combined in one cause. The cause of action in tax matters or against an assessment accrues only when the individual person, employer or tax payer was assessed.