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The Constitution of the Federal Republic of Nigeria, 1999 as amended provides for delegation of powers of collection of tax by the National Assembly to States and from States to the Local Government Council as highlighted above. Item 7-D of the Concurrent Legislative List provides thus:

In the exercise of its powers to impose any taxes or duty on:

(a) capital gains, incomes or profits of persons other than companies; and

(b) documents or transaction by way of stamp duties; the National Assembly may, subject to such conditions as it may be prescribe, provide that the collection of any such tax or duty or the administration of the law imposing it shall be carried out by the government of a state or other authority of a state.

In item 8 – D, it provides:

where an Act of the National Assembly provides for the collection of tax or duty on capital gains, incomes or profit or the administration of any law by any authority of a state in accordance

197 (1985) 1 NWLR (pt.3) 395 at 413.

66 with paragraph 7 hereof, it shall regulate the liability of persons to

such tax or duty in such manner as to ensure that such tax or duty is not levied on the same person by more than one state.

In paragraph 8 stated above, the Constitution provides that there must not be a duplication of taxes on the same person by more than one state. The Constitution merely stated that a person‟s liability to the tax delegated to the States to collect shall be once.

Item 9-D of the Concurrent Legislative List also provides thus:

A House of Assembly may subject to such conditions as it may prescribe, make provisions for the collection of any tax, fee or rate or for the administration of the law providing for such collection by a local government council.

It has remained an unending argument whether considering the provisions of the CFRN 1999 as amended on Item 7-D and 9-D of the Concurrent Legislative List, it could be said that the States and Local Governments have been conferred with powers to impose tax.

Fabura¹⁹⁸ commenting on the delegation of powers to collect taxes by the National Assembly to the states, said, items D7 and 8 merely empowered the Federal Government to delegate to the State governments the exercise of an executive function of the collection of taxes specified therein. It does not envisage the delegation of any form of concurrent legislative function to the State. The express wordings of the CFRN 1999 as amended demonstrate clearly that only the Federal Government can legislate with regards to the imposition, levy, collection and administration of any tax or duty envisaged under D7 and D8.The state governments are assigned the responsibility for the collection and administration of any tax or duty imposed by an Act of the Federal Government.

198M TFabura, Analysis of State Taxing Powers, in Akinle O. (ed) Tax Law and Administration NIALS quoted in M TAbdulrazaq (ed) C.I.T.N Nigeria Tax Guide and Statutes, 1^sted p. 654.

67 Sanni¹⁹⁹ in analysing the issues of delegation of powers under item D7 of the Concurrent Legislative List contained in the CFRN 1999 as amended on States, declared the view to be erroneous and relied on sections 2(2) of the Personal Income Tax Act and section 4(2) of the Stamp Duties Act. The sections 2(2) of PITA and 4(2) of Stamp Duties Act were enacted pursuant to item D7 of the CFRN 1979 which is identical with item D7 of the CFRN 1999 as amended.

The said section 2(2) PITA provides that:

In the case of an individual other than an itinerant worker and persons covered under paragraph (b) of subsection (1) of this section, tax for any year of assessment may be imposed only by the state in which the individual is deemed to be resident for that year under the provisions of the first schedule and in the case of persons referred to in subsection (1)(b) of this section, tax shall be imposed by the Federal Board of Inland Revenue.

Section 4(2) of the Stamp Duties Act, on the other hand provides that the State government shall collect duties in respect of instruments executed between persons or individuals at such rate to be imposed or charged as may be agreed with the Federal Government. From the reproduced sections, it would appear that there is a conflict between the provisions and the state of the law on powers to impose tax. In the opinion of Agbonika,²⁰⁰ she relied on the view of Sanni and said:

A cursory reading of the provisions reproduced above especially with reference to the word „imposed‟, would suggest that State Governments have the power to impose personal income tax and

199 ASanni, Division of Taxing Powers in M TAbulrazaq (ed) C.I.T.N. Nigeria Tax Guide, (Lagos, NIALS; 2002) p.

654 – 656.

200J AAgbonika,Problems of Personal Income Tax in Nigeria, op. cit p. 200.

68 stamp duties; however, if the entire provisions of section 2(2) of

the PITA and S. 4(2) of the Stamp Duties Act are read together, it will become clear that the object is to identify the relevant tax authority in respect of the income of a taxable person and not to create undue conflict of jurisdiction between the administrative authorities of two or more states over the same income.

Umenweke,²⁰¹ in his view on the provisions of the Constitution said:

The provision of the Constitution as stated above as it relates to the power to tax by the three levels of government cannot but create conflict. This conflict is more pronounced in the areas of payment of stamp duty, payment for business premises, development levy, withholding tax, sharing of value added tax (VAT) and capital gains tax.

Another area of great concern is the wordings of the section 2(2) of the Personal Income Tax (Amendment) Act which reads, “…tax shall be imposed by the Federal Board of Inland Revenue.The amendment of the Personal Income Tax Act 2011, still retained the Federal Board of Inland Revenue which has ceased to exist in 2007.It is the Federal Inland Revenue Service that was the Federal Tax Authority as provided.²⁰²Sanni introducing the reading of section 2(2) of Personal Income Tax and section 4(2) of the Stamp Duties Act concluded by recommending the amendment of the laws.

Noteworthy is the fact that the Personal Income Tax Act has undergone an amendment in 2011. The provisions of section 2(2)²⁰³ reads:

201M NUmenweke, Tax Law and Its Implications for Foreign Investments in Nigeria, op. cit. p. 43.

202 Federal Inland Revenue (Establishment) Act, 2007, S. 1.

203Personal Income Tax (Amendment) Act, 2011, s. 2(2).

69 In the case of an individual other than an itinerant worker and

persons covered under paragraph (b) of subsection (1) of this section, tax for any year of assessment maybe collected only by the State in which the individual is deemed to be resident for that year under the provisions of the first schedule to this Act and in the case of persons referred to in subsection (1)(b) of this section, tax shall be collected by the Federal Board of Inland Revenue.

The confusion created by the wordings of the items D7 and D9 of the concurrent legislative list continues as series of interpretations have come up but is not ending. The controversy led to the imposition of taxes arbitrarily whether they possessed the powers or not relying on the delegated power as justification. The consequences of this is the prevalence of multiple taxation, double taxation and persistent litigation suffered by tax payers and tax authorities.

The only available remedy to the confusion and controversy is placing heavy reliance on the provisions of Taxes and Levies (Approved List for Collection) Act which made effort to streamline the taxes each tier of government should collect.