FISCAL FEDERALISM AND QUEST FOR RESTRUCTURING IN NIGERIA: LESSONS FROM UNITED STATES OF AMERICA

Abstract

Restructuring is no doubt the latest and most argued issue in the political and fiscal history of Nigeria. Both political and non-political actors throw their weight, ideas and perception of what they presumed the concept of restructuring to mean. There are generally two basic methods or mode of restructuring in Nigeria; the conservative and the radical method of restructuring. The two methods are in agreement that there is fundamental defect in the Nigerian fiscal federal system because of the over-centralization of the federal system following decades of military rule with its central command structure, the lack of compliance or adherence to the constitutional provision of federal character and marginalization of certain geopolitical zone. The Nigerian Constitution vested the power to impose tax only on the National Assembly, and thereby making the State and Local Governments subject to the Federal government instead of coordinate. The United States has a decentralized tax administration with each federal, state, and local government having its own tax administration to collect the taxes it imposed. This decentralization gives each government maximum fiscal independence and control over the base and rates of its taxes. More so, in United States of America, the local governments have right to self-government both politically and fiscally, making them largely autonomous, able to administer their own local ordinances, regulations, license, tax and acquire debt. This study is aimed at critical examination of restructuring questions in Nigeria and possible lessons from the United States of America. The work adopted the doctrinal research methodology and data were gathered from both primary and secondary sources. The study discovered that the legal frameworks on restructuring in Nigeria are only in favor of centralization of fiscal powers. The study recommended that the Constitution of the Federal Republic of Nigeria 1999 (as amended) be further amended to grant fiscal autonomy to the State and the local governments, granting them powers to impose and administer, and collect taxes imposed.