The main source of power to tax imposition in Nigeria are the constitution and the series of creating or amending consolidating or repealing Acts and laws with the subsequent finance law, directives and statuory instruments. This series of applicable laws affects the taxation relationship between the Federal, State and Local Governments. Primarily, the power to impose taxes in Nigeria derives from the constitution. Under the 1999 constitution (as amended) the National Assembly has powers to make laws for the peace, order and good governance of the federation or any part therefore with respect to any matte included in the exclusive legislative list.

The constitution also make provisions for the power to make laws with respect to any mater in the concurrent list to the state legislators and item 7 of the concurrent list is on collection of taxes of which the federal legislators is allowed to delegate the collection or administration to the government or other authority of state. Item 9 of the same concurrent list makes provisions for the collection of any tax or rate for the administration of laws providing for such collection by the state government: with these provisions, the question has been, can state by nature of item 9 also impose any tax under concurrent list? Bello JSC in Abberuaba V. Attorney General Ogun State7 noted that,
“any tax as used in the provision empowers the states to impose tax an all matters in the concurrent list and Residual matters…….

A good look at the constitutional provision indicates that state can impose taxes except taxation of Companies’ Income, Petroleum profits and Capital Gains. However, the power of state to impose any tax over concurrent matters could only be exercised subject to the rule of inconsistency and doctrine of covering the field. However, for the inconsistency to arise, the State law must indicate a disobedience to Federal law. Inconsistency connotes incompatibility and that the two laws are at variance to each other. Both governments must therefore make legislation on a concurrent matter before any question of inconsistency can arise. Only then can comparison be made to see if one has conflicted with the other. As it stands, a federal lawn on a concurrent matter does not necessarily preclude state law on the same matter. It can however be argued that a close look of Exclusive Legislative List8 which outline the taxing power exclusively for the Federal Government is so extensive as to suggest that the constitution did not intend conferring on the state any taxing power despite the fact that the combined effect of the provisions of section 4(6) and (7) of the constitution gave powers to state House of Assembly to make laws for example subsection on 4 (7) (a) and (b) provides that
The House of assembly of a state shall have power to make laws for the peace, order and good government of the state or any part therefore with respect to the following matters that is to say  
a          Any matter not included in the Exclusive legislative list set out in part 1 of the second schedule to this constitution
b.         Any matter included in the concurrent legislative list set in the first column of part 11 of the second schedule to this constitution to the extent prescribed in the second column opposite thereto; and…
It is disheartening to note that despite this division, problem of multiplicity of taxes still exists, for instance in the case of Mobil producing (Nig) limited V. Tai local Government council and 2 ors, 9the issue of multiplicity of taxes was raised where the local government made a bye law for the collection of tax on education and youth empowerment, government, local government sticker, craft man development skills etc. The court held
“That the local government has limited powers on the areas in which they can levy and impose taxes and these powers are within the area specified under part iii of the Act”.    

Part 1 of the schedule of the Taxes and Levies (Approved list for collection) Act10 provide that the taxes and levies due to the federal government are
1.         Companies income tax
2.         Withholding Tax on companies Residents of the federal capital Territory, Abuja and Non-resident individuals
3.         Petroleum profit tax
4.         Value Added tax11
5.         Education tax
6.         Capital Gains on Residents of the federal capital Territory, Abuja, Bodies, and corporate and Non-resident individual.
7.         Stamp duties on bodies corporate Residents of the Federal Capital Territory Abuja.
8.         Personal Income Tax in respect of
            a.         Member of the Armed Forces of the Federation
            b.         Member of the Nigerian Police Force.
            c.         Residents of the Federal Capital Territory, and
            d.         Staff of the Ministry of Foreign Affairs and Non-resident        individuals.
Part 11 of the schedule to the Act provided for the tax and levies collectible by the state government as follows:-
1.                  Personal income tax12 in respect of -
a.                  Pay – As – You Earn (PAYE) and
b.                  Direct taxation (self assessment)
2.                  Withholding Tax (individuals only)
3.                  Capital Tax (individual only)
4.                  Stamp Duties on instruments Executed by individuals,
5.                  Pool Betting and Lotteries, Gaining and casino Taxes
6.                  Road Taxes,
7.                  Business Premises Registration Fee in respect of
a.                  Urban area as defined by each state, maximum of
i,          10,000 for registration and
ii,         5,000 per annum for renewal of registration
b.                  Rural areas
i,          N2,000 for registration and
ii,         N1, 000 per annum for removal of registration
8.                  Development levy (Individuals only) not more than N100 per Annum on all taxable individuals.
9.                  Nearing of street Registration fees in the state capital.
10.             Right of occupancy fees on lands owned by he State government in Urban Areas of the State.
11.             Market Taxes and Levies where
Part 111, of the schedules to the Act provides for taxes and levies collectible by the local government. They are as follows:
1.                  Shops and Kiosk Rates.
2.                  Tenement Rates.
3.                  On and off liquor license fees.
4.                  Slaughter slap fees.
5.                  Marriage, Birth Death registration fees,
6.                  Naming of street registration fee, Exchange any street in the state capital.
7.                  Right of occupancy fees on lands in Rural Areas, excluding those collectible by the federal and state governments.
8.                  Market Taxes and levies exchange any market where state finance is involved.
9.                  Motor Park Levies.
10.             Domestic Animal License fees.
11.             Bicycle, Truck, Canoe, wheel Barrow and cart fees other than mechanically propelled truck.
12.             Cattle Tax payable by cattle farmers only.
13.             Merriment and Road closure key.
14.             Radio and Television license fees (other than radio television transmitter).
15.             Vehicle Radio license fees (to be imposed by the local government of the state in which the car is registered).
16.             Wrong parking charges.
17.             Public conveniences, Sewage and Refused Disposal Fees.
18.             Customary Burial Ground permits fees.
19.             Religious Place Establishment Permit Fees.
20.             Signboard and Advertisement Permit Fees.
In the administration of tax, it is important that the tier of government act according to the power clearly spelt out in the taxes and levies (Approved List of Collection) Act. This was the position of the court in Knight, Frank and Ruthley V. A.G Kano state. 13Interestingly, the three tiers of government have delegated the collection and administration of these taxes to the Federal In land Revenue Services14 state board of inland Revenue15, and the finance committee of respective local government.16

7 (1985) WLR (part) 395 at p. 414
8 Part 11 Second Schedule Constitution of the Federal Republic of Nigeria
9 (2004) 10 N.C.L.R 99
10 Cap T2, laws of the federation of Nigeria, 2004.
11 Ibid
12 Manufactures Association of Nigeria V. Attorney-general Lagos state (2004) All FWLR (PT. 199) 1327
13 (1998) 7 NWLR (PR. 556)1
14 Section 3 (1) of the companies income tax Act, cap (21. laws of the federation of Nigeria, 2004
15 Section 87 of personal income Tax Act cap p8. laws of the federation of Nigeria. 2004, see the case of Exclusive stores ltd V. Edo Board of internal revenue (2005) All FWLR (PT 249 1827 C.A
16 Ibid
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