Personal Income Tax in Nigerian Fiscal Federalism

This text ‘Personal Income Tax in Nigerian Fiscal Federalism’ x-rays applicable laws and practical issues as it relates to personal income tax in Nigeria within the context of fiscal federalism. Personal income tax is the most widespread modern tax in Nigeria covering several millions of taxpayers, but yields less than 10 percent of the overall tax revenue to the Government purse. Personal income tax is an area that poses great challenges of administration especially since the legislating Federal authority only delegate’s powers of collection to the State authorities. It is still questionable whether States are answerable to the Federal Government for the amounts so collected under the powers delegated to it by Federal legislation. The usual rules of agency suggest that an agent acting under a delegated authority cannot be heard contesting the subject matter of agency with the principal.
Tax legislation in Nigeria keeps going through series of amendments. The Finance Act 2019 was passed by the National Assembly and assented to by the President of the Federal Republic of Nigeria, by the end of the 2020 another Finance Act was passed by the National Assembly assented to by Mr. President. In effect, we have the Finance Act, 2019, 2020 and 2021 respectively, also the Petroleum Industry Act, 2021 was passed by the National Assembly and assented to by the President of the Federal Republic of Nigeria which brought further changes and amendments as it relates to the legal, regulatory, fiscal framework to the Nigerian petroleum industry as well as host communities. All of these legislation brought to fore innovations, amendments and new developments to our tax jurisprudence.
It is apt to state that they are series of publications in the areas of personal income tax as a subject and fiscal federalism as well; however, this text has harmonized and married the challenges of personal income tax with fiscal federalism in Nigeria which undoubtedly is a watershed in the annals of tax jurisprudence in Nigeria. This is so especially as this text has brought together the various issues relating to the challenges of personal income tax in Nigerian fiscal federalism, emerging issues in tax administration in Nigeria. Issues like, the Finance Act, 2019, 2020 and 2021, multiplicity of tax, Taxes and Levies (Approved list for Collection) Act, the pivotal and contentious issue of outsourcing tax collection in Nigeria, the Treasury Single Account, Voluntary Assets and Income Declaration Scheme (VAIDS), the jurisdictional issues between the Tax Appeal Tribunal and the Federal High Court with special focus on the distinction between Tax Appeal Tribunal and Value Added Tax Tribunal. Particular emphasis placed on the heated issue of the diversification of the Nigerian economy.
This text is significant and a must read for all as it would be beneficial to students of taxation, the academia, tax practitioners, tax administrators, the court and all stakeholders in the tax system.