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Provisions of the Constitution regarding fiscal federalism.

Provisions of the Constitution regarding fiscal federalism.

Provisions of the Constitution regarding fiscal federalism in Nigeria.

The mechanism of revenue generation and transfer within a federal system is known as fiscal federalism. It is concerned with the financial roles and obligations of component units within a federal framework.

Nigeria’s fiscal federalism is the result of a combination of historical, economic, and political factors.

Geographic, cultural, and social considerations all have a role.

Cap C.23 LFN 2004 (as amended) of the Constitution of the Federal Republic of Nigeria (CFRN)

The Constitution (as amended) enshrines the core principles of federalism.

“Nigeria is one indivisible sovereign state,” says Section 2(1) of the CFRN.

Section 2(2) states, “The Federal Republic of Nigeria must be known by the name of the Federal Republic of Nigeria,” but section 2(3) states, “The Federal Republic of Nigeria shall be known by the

“Nigeria should be a federation of states with a federal capital,” it says.

Territory”.

Various levels of government have different structures and taxing rights.

Nigeria is divided into three constituencies for tax purposes and in compliance with its constitution: the Federal, State, and Local governments.

All taxable corporate organisations, personnel of the Nigerian military services, and those engaged in Nigeria’s foreign missions are subject to tax assessment and collection by the Federal Government. The Federal Capital Territory Internal Revenue Service (FCT-IRS) is responsible for the assessment and collection of taxes due from all taxable individual residents of the Federal Capital Territory, Abuja, under the Federal Capital Territory Internal Revenue Service (FCT-IRS) Act of 2015. Prior to the enactment of the FCT – IRS Act of 2015, the Federal Government was in charge of tax assessment and collection for all taxable individual residents of the Federal Capital Territory, Abuja.

Each state government With the exception of personnel of the Nigerian Armed Forces, employees of Nigerian foreign missions, and individual residents of the Federal Capital Territory, Abuja, the government is responsible for assessing and collecting taxes owed from all taxable persons domiciled in the state.

The Taxes and Levies (Approved List for Collection) Act No 21, 1998(as modified), now known as the Taxes and Levies (Approved List for Collection) Act CapT2 LFN 2004, establishes the taxation authority for each of the three levels of government (as amended).

Lovelyn

Lovelyn

I am a qualified chartered accoutant and an experienced customer care representative. I love to educate small business owners on tax trends and accounting.

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