LIMITATIONS TO THE EXERCISE OF TAXING POWERS BY LOCAL GOVERNMENTS IN NIGERIA: A CRITIQUE

Abstract

The exercise of taxing powers by Local government in Nigeria has been bedeviled with a lot of issues or challenges. The challenges range from an inherently built in bottlenecks to impose taxes on its own, to lack of the necessary vires to make bye-laws or regulations for the enforcement of their constitutionally granted powers. Every act or attempt to the exercise of this power to either impose tax or collect tax is met with stiff resistance and sometimes ultimately declared ultra vires. This has led to unhealthy rivalries between the local governments and state governments. In effect, most of the state governments sometimes unnecessarily interfere with the powers constitutionally left for the local governments in Nigeria. This is a slap on the Constitution and has seriously affected the operations of the local governments in Nigeria. It also accounts for the inability of the local governments to meet up with its expectations to the people. This work appraises the limitations to the exercise of taxing powers of the local government in Nigeria and its attendant consequences. The doctrinal method of data collection was adopted and analytical approach used in examining the research materials like the Constitution, taxing statutes, judicial decisions, textbooks, journal articles and internet sources. The work discovered that the challenges of the local government in their exercise of powers in tax matters in Nigeria are as a result of constitutional bottlenecks inbuilt in the system. The work recommended the amendment of section 7(1) & (6)(b) and 162(5), (6), (7) and (8) of the Constitution of the Federal Republic of Nigeria 1999 (as amended). This will necessarily grant the required vires to the local governments in Nigeria to become a taxing power properly so called.