Algorithm/Printer Interaction

195 taxes, rates and levies by both the State and Local government

authorities.⁴⁷

The imposition of multiple and arbitrary taxes by State governments, in most cases increases the cost of doing business and discourages trade and investment in Nigeria. For the State tax laws to stimulate trade and investment there is need to amend the constitution to entrench fiscal federalism, and expand the taxing powers of the States. This will discourage the detestable trend of trying to tax everything possible by State Governments, without considering the overall impact on the economy.

There is an urgent need to address the issue of non-fiscal federalism in Nigeria, to attract foreign investors. To achieve this, the Constitution needs to be amended to increase the taxing powers of State Government‘s. Thus, Items 58,59, and 62 of the Exclusive Legislative List of the Constitution should be moved to the Concurrent Legislative List of the Constitution.

5.3 Imposition and Collection of Levies, Rates, charges, Fees etc by State

196 effect of dwindling revenue from oil, States are forced to generate revenue by any means.

However, as earlier established, there seems to be an over concentration of taxing powers on the Federal Government by the Constitution.⁴⁸ Thus, the fiscal federalism structure of the 1999 Constitution⁴⁹ has to a large extent limited the ability of States to generate revenue. Irrespective of this fact, the States are constrained to depend on taxation as the most reliable alternative means of generating revenue.

The States oftentimes, have emphasized the potentials of taxation as a means of generating revenue to the detriment of other functions of taxation. Hence, the States have not been able to fully appreciate that taxation is an effective tool for socio economic development.

Thus, in the process of trying to generate revenue through taxation, the development of trade and investment is adversely affected. Consequently, investors do not see the states as conducive enough to do business; this is because the cost of doing business will be higher with the presence of these multiple state taxes in addition to federal taxes. In most cases, States impose double taxes on the same issue, by simply giving them different names. To further worsen the situation, investors are left with no choice other than to pay these state taxes after they have paid the federal taxes. This is because they operate their business in states except the ones that are solely based in the Federal Capital Territory. This practice is unfair to investors, because States share from the proceeds of the Federal Corporate tax.⁵⁰States, recognizing that they lack powers to impose Company Income Tax, have devised a means of taxing companies by imposing all manner of taxes. Some of these taxes are examined below.

48Op cit.

49Op cit.

50Pursuant to section 162,163 and 164 of the Constitution, op cit.

197 5.3.1 Environmental Tax.

Environmental taxes are among the taxes imposed by State governments that could be described as nuisance taxes. In most cases, they are either unnecessary or outside the legislative competence of the State Houses of Assembly on taxation. The most fundamental issue in this discussion is to ascertain whether the State Houses of Assembly has powers to legislate on environmental matters.

The Merriam Webster Dictionary defines environment as ‗the conditions that surround someone or something, the conditions and influences that affect the growth, health, progress, etc.of someone or something‘ or ‗the complex of physical, chemical and biotic factors (as climate, soil, and living things) that act upon an organism or an ecological community and ultimately determine its form and survival.‘⁵¹In other words environment implies the interaction of the natural world, air, land, sea, etc. with the living things in it.‘

The Constitution⁵² clearly sets out the environmental objectives of every tier of government; consequently, section 20 of the 1999 Constitution⁵³ provides as follows: ‗The State shall protect and improve the environment and safeguard the water, air, land, forest and wildlife of Nigeria.‘ This is the only direct provision on environmental matters in the constitution.However, this provision is non-justiciable as it is part of Chapter Two of the Constitution.⁵⁴

Generally, the Constitution⁵⁵ does not clearly State, which tier of government has the powers to control environmental matters. The Concurrent Legislative List does not have copious

51www.merriamwebster.com/dictionary/environment, accessed on 10th June 2014.

52op cit.

53op cit.

54Pursuant to Section 6(6) c of the 1999 Constitution, op cit.

55Op cit.

198 provisions on environment matters. However, there are a few items that have environmental implications in the Concurrent LegislativeList. For instance:

Items 3, 4 and 5 on Antiques, monuments and archives Items 13 and 14 on Electric power.

Items 17 and 18 on Industries, commercial and agricultural development and Items 21 and 22 on Scientific and technological Research.

It is instructive to note that the powers of the State to legislate on any item under the Concurrent LegislativeList are circumscribed by the doctrine of covering the field. The State Assemblies can also legislate on waste management issues and environmental sanitation issues for Local Government.⁵⁶ Thus, the powers of the State to legislate on environmental matters are mainly on Local Government environmental sanitation matters. Further discussion on this issue will be done while considering the taxing powers of Local Government in subsequent part of this chapter.

The National Assembly seems to have more powers to legislate on matters that affect the environment. In the Exclusive Legislative List⁵⁷the following items are connected with the environment.

Item 3 Aviation, including airports, safety of aircraft and carriage of passenger and Goods by air

Item 21 Drugs and poisons

Item 2 Fishing and fisheries other than fishing and fisheries in rivers, lakes, waterways, ponds and other inland waters within Nigeria.

Item 36 Maritime shipping and navigation on tidal waters, River Niger and its effluents on

56 Items 1 ( c), (e), (f), (h), and 2 (b) and c of the Fourth Schedule to the 1999, Constitution, op cit.

57 Part I of the Second Schedule of the 1999 Constitution, op cit.

199 any such other inland waterways designated by the National Assembly as

international waterway or to be an inter State waterway, seaports.

Item 37 Meteorology

Item 39 Mines and minerals, including oil fields, oil mining, geological surveys and Natural gas

Item 40 National parks Item 41 Nuclear energy Item 54 Quarantine

Also, by the provisions of item 68 of the Exclusive Legislative List of the Constitution,⁵⁸ any matter incidental or supplementary to any matter mentioned elsewhere in the list, is within the legislative competence of the National Assembly. It has been observed that, the above provision ‗…gives the federal government the pre-eminent position in all matters of environmental management.‘⁵⁹ It is obvious that the National Assembly can legislate on almost all environmental issues. However, based on section 20 of the Constitution,⁶⁰ the States can legislate on any issue that affects the environment, especially when that issue has not been covered by an act of the National Assembly.

State governments to a large extent have abused the powers to enact laws for the protection of the environment. In most cases, the government has revenue generation in mind, rather than the need to address environmental issues. This has led to the proliferation of environmental taxes and tariffs. In trying to use environmental issues to raise revenue, the environmental laws

58Op cit.

59 L Atsegbua et al, Environmental Law in Nigeria, Theory and Practice, (Lagos: Abuba press, 2003), p.18.

60Op cit.