Identifying potential participants and the process of sampling

150 A further review and amendment of the provisions of PITA is necessary in order to consolidate all reliefs and allowances into one allowance. This will reduce incidence of tax avoidance as every taxpayer would be entitled to the consolidated allowance only.

Furthermore, administrative measures rather than legislative should also be considered.

151 other, to raise financial resources necessary to meet the needs of each government. The matter is not as simple as this might appear to be desirable. Indeed the whole question of the division of financial powers of a federation constitutes an intricate and complex problem.⁴⁵¹ It is simple to put it that Nigerian arrangement and tax system is lopsided.

In terms of revenue assignment, the federal system in Nigeria grants minimal fiscal autonomy to the sub-national governments. While the Federal Government controls all major sources of revenue and taxes, all broad-based taxes such as Company Income Tax, Value Added Tax (VAT), Customs and Excise Duties, Petroleum Profit Tax and Education Tax, the State and Local Governments tax individuals. This limits their ability to raise independent revenue, thereby making them depend solely on allocation from the Federation Account to meet up with their responsibilities.⁴⁵² The Federal dominance of the inter-governmental fiscal relations which is not properly controlled had made the states completely dependent financially and thereof generally, upon the central government, thereby denying them of their autonomy in matters that directly concern them. This is not a recipe for political unity particularly in a developing heterogeneous society like Nigeria where there is differential socio-economic development with the central government apparently lacking any definitive policy to bring about even development. In areas of concurrent taxation such as the Personal Income Tax, Capital Gains Tax and Stamp Duties, the Federal government retains legislative power while sharing administrative powers with the states.⁴⁵³ States impose minor levies such as gambling taxes, motor vehicle license fees and user fees on economic and social services.⁴⁵⁴ The local governments on the other hand exercise greater revenue powers than

451A Ladipo, Public Administration,( London, Longman Publishers, 1984) p. 93.

452J A Magbonika and J A Agbonika, “Fiscal Federalism and the Challenges of Administration of Personal Income Tax in Nigeria” in Topical Issues on Nigeria Tax Laws and Related Areas, (Ibadan, Ababa Press, 2015) p. 408.

453 1999 Constitution of the Federal Republic of Nigeria as amended, second schedule, part II, items 7 and 8.

454 Taxes and Levies (Approved List for Collection) Act, First Schedule, part II.

152 the states. They can levy property taxes, rates on radio, television, bicycle, canoe and user charges on utilities like water, sewage and waste disposal.⁴⁵⁵

Under the Nigerian law, section 4(1) of the 1999 Constitution of the Federal Republic of Nigeria as amended, the legislative powers of the Federal Republic of Nigeria shall be vested in the National Assembly of the federation, consisting of both the Senate and House of Representatives. The National Assembly has power to make laws for peace, order and good government of the federation, regarding any matter provided in the Exclusive legislative list shall be to the exclusion of the House of Assembly of the States.⁴⁵⁶ It is of a serious concern to the tax revenue administration especially where the legislating federal authority only delegates power of collection to the state authorities. In a federation like Nigeria, states are component parts of the federation and are not answerable to the federal government on the amount collected under the power delegated to it by federal legislation. In Nigeria, there are Federal Government, 36 States, a Federal Capital Territory and 774 Local Governments.⁴⁵⁷

The fiscal arrangement among the different tiers of government in a federal structure is often referred to as Fiscal federalism. Thus, fiscal federalism refers to the allocation of tax-raising powers and responsibilities and expenditure responsibilities between levels of governments.⁴⁵⁸ Fiscal federalism concerns the division of public sector functions and finances among different tiers of government. This is the one severe challenge facing the country today dealing with revenue rights and jurisdiction. This has led to agitations for resource control and complete operation of fiscal federalism. It has remained the most dominant and contentious issue in the relationship between the government at the centre and the federating units, within the Nigeria political landscape. In a country with a federal system

455Ibid, part III, 1999 Constitution op. cit, part II, items 9 and 10.

456 1999 Constitution op. cit S. 4(2) & (3).

457Ibid, S. 2(1), 3(1) and 3(6).

458 S T Akindele, and M Olaopa, “Fiscal Federalism and Local Government Finance in Nigeria: An Examination of Revenue, Rights and Fiscal Jurisdiction” in Contemporary Issues in Public Administration, F Omotoso (ed) (Lagos, Bolabay Publications) p. 46 – 64.

153 of government, the different levels of government are deemed to be autonomous and should enjoy some level of independence in the area as they have some measure of “sovereign”

powers as provided for in the Constitution.