Taxation, an equitable system and constitutional core values for efficient financial stability in Nigeria

• Jurisdiction: South Africa
• Citation: (2019) 5(2) JCCL&P 79
• Author: Adedokun, K.
• Published date: 22 May 2020
• Pages: 79-94
• Date: 22 May 2020

79

TAXATION, AN EQUITABLE SYSTEM

AND CONSTITUTIONAL CORE

VALUES FOR EFFICIENT FINANCIAL

STABILITY IN NIGERIA

KAREEM ADEDOKUN*

Senior Lecturer Kwara State University, Malete

ABSTRACT

Nigeria is a federation consisting of 36 states and a Federal Capital

Territory. Each state needs adequate revenue for sustainability and has

autonomy to initiate and implement any policy that may promote

steady, internally generated revenue within its sphere. But such a

policy must align with the overall political objective of the nation,

enshrined in the Constitution. The Constitution advocates national

integration, residence right and adequate provision for facilities to

all citizens, believing that if a system is fair and equal, taxpayers will

be more willing to cooperate with it. However, some states of the

federation are implementing policies, particularly in education and

politics, marred by deep inequalities which affect revenue generation

and financial capability of the states. The author, using doctrinal and

survey sampling methods, critiques these discriminatory policies and

the way in which they interfere with the civic duty of tax obligation.

The paper finds that discriminatory practices do not only whittle

down revenue generation but also impair national integration.

Consequently, it is suggested that various state governments in

Nigeria should introduce a tax system that aims at catching many

types of income, and ensure judicious application of the tax proceeds

for the general and equal benefit of citizens regardless of their places

of birth. The suggestion, if accepted and utilised, will enhance revenue

generation, promote national integration and ensure delivery of the

dividends of democracy to the citizens.

Keywords: national integration; residence right; inequalities;

revenue generation; tax obligation

* NCE, LLB, LLM, PhD, BL.

(2019) 5(2) JCCL&P 79

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80

(2019) 5 (2) JOURNAL OF CORPORATE AND COMMERCIAL LAW & PRACTICE

I INTRODUCTION

The rule of law is an essential feature of the Nigerian Constitution. It is

a formula for expressing the absolute supremacy or predominance of

the Constitution over all authorities and persons within the country.

Positively, it implies abhorrence of any form of discrimination;

promotion of equality before the law; and subjection of all classes

of citizens to the ordinary law of the land. The concept is a clear

signal to all organs and tiers of government while enacting laws

or formulating policies to be guided by its sanctity, which detests

any form of discrimination in governance. In spite of this avowed

constitutional belief, certain policies of some state governments in

Nigeria are marred by deep inequalities, which affect the revenue

generation and financial capability of states, which revenue

generation can promote democratic ideals such as equality of access

to education and infrastructure.

A brief glance into the affairs of some states shows clear

manifestations of inequality and discrimination in sectors like

education, politics and employment. For instance, one can find the

introduction of discriminatory tuition fees in some states’ educational

institutions, while concerns about place of birth, as opposed to merit,

citizenship and capability hold sway in politics and employment.

The main consequence of this is disintegration, which is capable of

jeopardising the political objectives of government unequivocally

articulated in the fundamental objectives and directive principles

of state policy enshrined in the Constitution. More disturbing is

the fact that such discriminatory policies neither enhance revenue

generation nor promote national integration.

This problem can be better appreciated if one considers the fact

that no government can be efficient without financial stability, and

to ensure optional revenue generation, the ultimate target of the

laws and policies of any government should be the people and their

commercial activities within the state, regardless of their places of

origin, birth and political affiliations. Looking at the major taxes in

Nigeria, particularly personal income tax and value added tax, they

operate on the basis of state residence and consumption behaviour of

the people.1 The expected high yield from these taxes may boost the

finances of the state government, and a higher population should

translate into higher revenue generation via taxation. Therefore,

should a state government enact laws or initiate policies that are

fraught with discrimination or capable of promoting inequality,

it may result in population shrinkage and consequently deplete

revenue bases.

1 M T Abdulrazaq Revenue Law and Practice in Nigeria (2015) 307.

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