AN APPRAISAL OF THE LEGAL FRAMEWORK FOR TAX ADMINISTRATION AT LOCAL GOVERNMENT AREAS IN NIGERIA

ABSTRACT :

The system of government in Nigeria is such that the governmental powers are shared between the Central government and two other components: that is the states and the local government areas. The local government was not recognized under the political arrangement of the country until in 1976 when the military government carried out local government reforms which resulted in the inclusion of local government as a third tier of government under the 1979 constitution. By so doing, the Local government in Nigeria became entitled to statutory allocation from both the federal and state governments. Section 7 (1) of the 1999 Constitution (as amended) empowers state governments, to enact legislations with regards to the establishment, structure, compositions, finance and functions of democratically elected local government councils. PART II of the second schedule to the 1999 constitution under the Concurrent Legislative List, State Houses of Assembly are mandated to make provisions for the collection of taxes, fees or rates for the administration of the law, providing for such collection by the local government councils (as agencies of state government). With this development, local government councils cannot impose taxes or levies on anybody or corporation without recourse to the provisions of the law enacted by the federal or state legislature. All the local government taxes, levies or fees are usually imposed or charged in pursuant to federal or state laws, while the administrative functions of the collection is delegated to the local government councils. Sequel to these, we hereby critically appraise the legal framework under which local government councils collect taxes in Nigeria. To examine the ways in which Local Government Areas collect taxes under the laws made by State Houses of Assembly, the statutory rights of the taxpayers and explore the way in which tax collection could be improved. Federal and State Government legislative powers should be amended to include/accommodate the Local Government Councils in the legislative process which would enhance their tax collection, concluding that any tax imposed by the Local Government Areas outside the armed bit of laws made by the federal or states legislature will amount to ultra vies, null and void.

Keywords: Local Government Taxation, Tax Administration, Constitutional Framework, Legislative Competence, Ultra Vires