An Examination of the Application of Taxing Powers in Nigeria by Judicial Authorities

Abstract

By virtue of the Constitution of Federal Republic of Nigeria (As Amended) 1999 (here in-called “the Constitution”), Nigeria is a federation that consists of States and a Federal Capital Territory1. The local government is as well the creation of the constitution2. Nigeria therefore has the federal, state3 and local government4 (here-in after referred to as “Levels of Government”). The Constitution expressly provides that “Nigeria is one indivisible and indissoluble sovereign state to be known by the name; Federal Republic of Nigeria”5. The Constitution further states that Nigeria shall be a Federation consisting of States and a Federal Capital Territory6. Nigeria consists of 36 states, one Federal Capital territory and 774 local government areas. Taxing powers are divided among these levels of government. Each level of government is given a meaningful tax window wide enough to enable it carry out its assigned functions. Conflicts do arise among levels of government over tax jurisdiction. This conflict more often than not ends up in court, and the judiciary makes pronouncement relating to the conflict. This work therefore ventures into examining the attitude of the judiciary in the application of the provisions of the Constitution and other legal framework for taxing powers in Nigeria to determine the adherence of the judiciary to these legal frameworks in their pronouncements. In doing this, we postulate one research question to guide this work and that is: Whether the Nigerian judiciary is active and upholds strict adherence to the provisions of the legal framework for taxing powers in Nigeria? This paper employs doctrinal or conceptual legal research methodology and the materials used were sourced from primary, secondary and tertiary sources found in hard copies and on the internet. This paper found out that Nigerian judiciary does not countenance flouting of the legal framework for taxing powers in Nigeria and that, to a reasonable degree, is proactive and maintains strict adherence to the dictates of legal framework for taxing powers in Nigeria. This paper recommends stiff punishment for scandalous breach of the legal framework for taxing power by any level of government and the creation of a separate tribunal for trial of breach of the legal framework for direct taxes and indirect taxes to enhance speedy dispensation of justice in the trial of tax cases.