June 19, 2021


Africa's Media Giant

Constitution Review: CITN urges review of taxing powers

By Adeyemi Adeleye/Oluwatope Lawanson

The Chartered Institute of Taxation of Nigeria (CITN) has urged the National Assembly to revisit and review division of taxing powers of federating states in the ongoing 1999 Constitutional amendment process.

Dame Gladys Simplice, President of  CITN, made the proposal in a memoranda to the National Assembly during the South-West zonal public hearing on the 1999 Constitutional Review in Lagos on Wednesday.

According to her, taxing powers of the state appears to be illusive and speculative under the current constitution.

Simplice recommended a separate state legislative list as modeled by the 1995 draft constitution to enumerate subject that states could legislate on, and to set out basis for taxes impossible, administrable and collectable by state.

She also recommended that Item 59 of the Exclusive Legislative List (Taxation of Income, Capital Gains and Stamp Duties), Item 13 (Copyright) and Item 62 (Trade and Commerce and in particular sub-items a, b, d, e and f) should be altered.

According to her, Item 43 (patents, trademarks, trade or business names, industrial designs and merchandise marks) should also be altered.

Simplice said this should be in favour of the state and local government areas in terms of legislation, imposition and administration of incidental taxes on the subject.

“An exclusive use of value added of states and local government for the autonomous revenue is highly recommended.

“The current constitutional justification of Valued Added Tax Act under Section 315 of the Constitution to the effect that it has covered fields with respect to sales related tax is misgiving.

“It is recommended that VAT should be made into concurrent legislative list with a different formula to wit:

“The Federal Government should legislate and administer inter-state, wholesale and export stage VAT while states should register and administer intra-state and retail stage VAT,” she said.

According to her, either way, collections of these revenues should be independent of use by each state and Federal Government.

She added that the present condition of the constitution which lumped taxing powers with legislative powers, gave erroneous impression that states did not have specific powers to impose and administer taxes except by relying on imaginary residual list.

The president noted that there were certain items in the exclusive and concurrent legislative list that the federal government should not have business dealing with, adding that this rendered states and local governments mere parasitic appendages of the  federal government.

“Considering peculiar needs and development of state and local government which are closer to the people, there is practical need to evolve expansive tax and revenue net. This current configuration of the constitution do not encourage this reality.

” Widening taxing powers of the states will encourage high commitment of fiscal mobilisation and enhance healthy development competitions among the federating units,” she said.

Also, Simplice said the constitution should ensure independence of the Auditor General of the Federation so as to ensure accountability, transparency and credibility.

She added that this should also be amended to empower the auditor general to direct refund of any fund from any individual deemed not to have been spent for the purposes it was meant.

The CITN president said there was need for a clear demarcation of exclusive federal and state legislative list.

“This will guarantee powers of the states and allow them to function without much dependence on the federal government,” she said.

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