Inequities in the Constitutional Allocation of Taxing Rights in Nigeria

Benson Idahosa University Law Journal, Vol. 2, No. 1, pp. 308-327, ISSN 1115837, October 2015

16 Pages Posted: 21 Feb 2017

See all articles by Adure Uzo-Peters

Adure Uzo-Peters

University of Ibadan - Faculty of Law

Date Written: October 18, 2015

Abstract

In the wake of the recent fall in oil prices globally, it has become apparent that Nigeria’s revenue has dropped, forcing the nation into desperate financial turmoil. As a consequence of dwindling resources, states and local governments are worst hit as they continuously rely on the allocation from the federation account as a main source of revenue. Constitutionally, their taxing powers are also streamlined to certain areas that do not allow them maximise fully, the resources within their state. The combined effect of dwindling allocation from the federal government and the lack of vires to levy appropriate taxes to increase revenue has forced state and local governments in Nigeria to levy numerous taxes that are ultra vires and unconstitutional. This article concerns itself with the implications of the current constitutional allocation of taxing rights and considers the revenue allocation regime in Nigeria to give an accurate picture of the predicament of the state governments. The paper explores constraints of the current schema citing examples such as multiplicity of taxes and the over-reliance of states on the federal government for revenue. The paper demonstrates how inherent problems do not augur well with an efficient tax system. Attempt is made to suggest a more statecentric approach to tax collection and payment, and the paper concludes by recommending constitutional amendment which incorporates a tax sharing formula between states and the federal government based on certain connecting factors.

This paper proposes that there is an urgent need to re-visit the extant tax regime in Nigeria, as a first step in tackling fiscal problems of the State and Local governments.

Keywords: Taxation, Constitution, Federalism

JEL Classification: K34

Suggested Citation

Uzo-Peters, Adure, Inequities in the Constitutional Allocation of Taxing Rights in Nigeria (October 18, 2015). Benson Idahosa University Law Journal, Vol. 2, No. 1, pp. 308-327, ISSN 1115837, October 2015, Available at SSRN: https://ssrn.com/abstract=2919791

Adure Uzo-Peters (Contact Author)

University of Ibadan - Faculty of Law ( email )

Ibadan, Oyo State 200005
Nigeria

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