AN APPRAISAL OF THE TAXING POWERS OF THE THREE TIERS OF GOVERNMENT IN NIGERIA

Abstract

Taxation power is the power of a sovereign government to raise revenue by imposing compulsory taxes or levies on persons or sources of wealth within its territory. In a single tier system of government, there is no problem with the devolution of this power. Consequently such a government can impose any form of tax for any purpose and at any rate. Nigeria as a federal republic has three tiers of government that is federal, state and local. A fundamental feature of federalism is the allocation of the power among those tiers, taxation power inclusive. Therefore it is essential that powers are allocated and defined in the fundamental laws of the land. This article discusses how the various laws in place have distributed taxing powers in Nigeria and to also ascertain which tier of government has the power to impose and collect what tax. The aim is to succinctly discuss the distribution of taxing powers among the three tiers of government in Nigeria in a coherent form for the proper guidance of taxpayers, legal practitioners, tax practitioners, researchers, students and investors.