RULES FOR INTERPRETATION OF TAXING STATUTES: A CRITICAL APPRAISAL OF NEW TRENDS AND APPROACHES

ABSTRACT Legislative draftsman need to demonstrate greater precision in language whilst drafting fiscal statutes. Use of imprecise or ambiguous language, could in the wake of the strict construction rule, cause the entire legislative enterprise to collapse. In tandem with the strict reading of the charging section goes the liberal reading of the exemption provisions. This is on the reasoning that an exemption provision is something akin to a beneficent provision and hence the rule applicable for such provisions generally should also apply when such provisions are part of taxing statutes. In more recent times however, Courts have adopted the same strict scrutiny of exemption provisions as is extended to charging sections. The rationale being that a liberal reading of the exemption provisions will reduce the revenues that can be raised and this reduction impacts upon the welfare of the population at large. Consequently, these judges have perceived pro-revenue interpretations as interpretations which were advancing social welfare. Thus we find there has been a change in the approaches of the judges in interpreting a taxing statute in the recent past. This paper deals with the new trends and approaches in interpretation of taxing statutes.