Simulating A Scene

The federal taxing power is contained under section 4 of the CFRN 1999 as amended and better specified in the exclusive legislative list and concurrent legislative list. Under the Exclusive Legislative List, the federal government has jurisdiction to exercise power on the following taxes: customs and excise duties,²⁸⁷ export duties,²⁸⁸ revenue from shipping and navigation on international waters, inland water ways and from federal ports,²⁸⁹ mining rents and royalties,²⁹⁰ stamp duties,²⁹¹ taxation of incomes, profits and capital gains.²⁹²This is with the exception as otherwise prescribed by the Constitution.²⁹³ The Federal Government has exclusive power to legislate on the taxation of individuals and companies throughout the whole federation.²⁹⁴ The Federal Government has power to legislate on the following:

Trade and Commerce²⁹⁵which comprises of:

(a) trade and commerce between Nigeria and other countries, including import of commodities into and export of commodities from Nigeria and trade and commerce between the States;

(b) establishment of a purchasing authority with power to acquire for export or sale in world markets such agricultural produce as may be designated by the National Assembly;

287 Constitution of the Federal Republic of Nigeria, Second Schedule, Part I, Item 16.

288Ibid, item 25.

289Ibid, item 36.

290Ibid, item 37.

291Ibid, item 58.

292Ibid, item 59.

293Ibid, S. 4(3).

294Ibid, s. 4(2) & item 59 Exclusive Legislative List.

295Ibid, item 67.

93 (c) inspection of produce to be exported from Nigeria and the enforcement of grades and

standards of quality in respect of produce so inspected;

(d) establishment of a body to prescribe and enforce standards of goods and commodities offered for sale;

(e) control of the prices of goods and commodities designated by the National Assembly as essential goods or commodities; and

(f) registration of business names.

In wireless, broadcasting and television other than broadcasting and television provided by the government of a State; allocation of wave lengths for wireless, broadcasting and television transmission.²⁹⁶The Federal Government has to the exclusion of any other tier of government power to legislate on all the matters enumerated.²⁹⁷ The implication is that no other level of government can impose tax on the following:

1. Excise duty

2. Import and export duty

3. Companies tax or any other type of tax on companies 4. Petroleum tax or taxes relating to mines and minerals 5. Stamp duties

6. Incomes, profits and capital gains taxes 7. Taxes relating to trade and commerce

8. Communication (e.g. radio and television license etc.) and telecommunication.

296Ibid, item 66.

297 M N Umenweke, Tax Law and its Implications for Foreign Investments in Nigeria, (Enugu: Nolix Educational Publications, 2008) p. 40.

94 3.5.2.3 State Taxing Powers

The States Houses of Assembly were empowered under the Constitution²⁹⁸ to impose and collect tax. The states also subject to the Constitution shall ensure the existence of a law that will provide for the establishment, structure, composition, finance and functions of the local government.²⁹⁹ The states also enjoys the latitude to impose tax on residual matters.³⁰⁰

The powers of the State Houses of Assembly to impose tax has been a serious controversy between authors. Some hold the opinion that the state has the requisite powers whereas others hold to the contrary. In the view of Agbonika³⁰¹ leading one group, the States have not been conferred with taxing powers directly or positively. The State taxing powers could therefore be impliedly derived from the general provision conferring legislative powers on States, they cited section 4(7) of the Constitution.

Some other authors³⁰² on the other hand are of the view that States were conferred with taxing powers. Their view is that various states impose various taxes like capital gains, tax, withholding tax, stamp duties, business premises registration fees, pools betting, loitering, gaming and casino taxes, economic development levy, tenement rates and such other taxes. Individuals within the various states are also required to pay personal income tax, capital gains tax, stamp duties, withholding tax.³⁰³ Section 4(7) of the Constitution conferred on the State governments, powers to make laws on any subject matter that is not on the exclusive legislative list. Moreover section 4(7)(b) of the Constitution states that any matter included in the concurrent legislative list set out in the first column of part II of the second schedule to this Constitution to the extent prescribed in the second column opposite thereto;

298 The Constitution, op cit, s. 4(7).

299Ibid, s. 7(1).

300 Attorney-General Ogun State v Aberuagba (1985) 1 NWLR (pt 3) 395 at 413.

301 J A Agbonika, Problems of Personal Income Tax in Nigeria, (Ibadan: Ababa Press, 2012) p. 197.

302 M T Fabura, Analysis of State Taxing Powers in O Akande (e) Tax Law and Administration NIALS quoted in M T Abdulrazaq (ed) C.I.T.N. Nigerian Tax Guide and Statutes, 1^stedn. p. 564. S Abiola, Division of Taxing Powers in M T Abdulrazaq (ed) CITN Nigerian Tax Guide (Lagos: 2002) p. 656.

303 M N Umenweke, op. cit p. 41.

95 Again, in respect of matters in the concurrent legislative list, the inconsistency rule inserted in section 4(5) of the Constitution restricts states from legislating on matters contained therein where the federal government has covered the field. It is against this background that the extent of the powers to make law to impose tax is described as the residual list. It is also in doubt whether there is anything left for the state government to legislate on. The National Assembly has made laws on the taxes to be collected, for instance, the Personal Income Tax Act, Value Added Tax Act,³⁰⁴ and Stamp Duties Act covered the field on those areas of taxation. The argument continues for and against the state government powers to impose tax. It is our view that there are still areas where the state can legislate and same will be discussed subsequently in this work.