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1. Introduction
Due to multiple taxation ravaging Nigeria during the military era, the Military Government promulgated the Taxes and Levies (Approved List for Collection) Decree of 1998 (the “Decree”). The Decree was designed to set out the taxes and levies collectable by the three tiers of government: Federal Government (“FG”), State Government (“SG”) and Local Government (“LG”). The Decree became modified under section 315 of the Constitution of the Federal Republic of Nigeria (the “Constitution”) to the Taxes and Levies (Approved List for Collection) Act, 1998 (the “Act”). However, the validity of the Act continues to be a subject of constitutional criticism and judicial scrutiny as discernible from different Nigerian cases.1 The criticisms rest majorly on three (3) reasons which are: (i) arrogation of supremacy over the constitution to itself; (ii) housing unconstitutional provisions that offend the constitutional division of tax powers; and (iii) non-qualification of the Decree as existing statute.
In this article, we assessed the validity of the Act in the light of the recently decided case of AG Abia State v. Imo Trans. Co. Ltd (2025). We identified the criticisms levelled against the Act, reviewed relevant Nigerian cases on the validity of the Act, and concluded thats by the decision in AG Abia State v. Imo Trans. Co. Ltd., the Act has become void and inoperative in Nigeria.
The article is segmentalized into four (4) parts. The first segment gives an overview of the Act by explicating its key provisions, including its well-played role in the fight against multiple taxation in Nigeria. The second segment is the crux of this paper as it examines the validity of the Act through the judicial lens of the Nigerian Courts, especially in the light of the recent decision of the Supreme Court in A.G Abia State v. Imo Trans. Co. Ltd.2 In the third segment, we give a brief commentary on the subject matter, while the last segment concludes that the Act, taken as a whole, is unconstitutional and invalid.
2. An Overview of the Taxes and Levies (Approved List for Collection) Act
The Act clarified the revenue-collection power of the three (3) tiers of the government by classifying the taxes and levies collectable by each of them.3 The Act is divided into five sections and a schedule with three (3) parts. Section 1 of the Act is on the responsibility of the FG, SG and LG in the collection of certain taxes and levies as listed in the Schedule to the Act. It also empowers the Federal Ministry of Finance to amend the Schedule to the Act on the advice of the Joint Tax Board (JTB) and by an order published in the Gazette
By section 2 of the Act, only the appropriate tax authorities designated for the FG, SG and LG can assess and collect taxes and levies reserved for them respectively in the Schedule.
The Schedule to the Act outlines several taxes collectable by the FG, the SG and the LG. Part 1 of the Schedule identifies the taxes collectable by the FG which includes the companies income tax (the “CIT”), withholding tax on companies, residents of the Federal Capital Territory (the “FCT”) and non-resident individuals (the “WHT”), petroleum profits tax (the “PPT”), value added tax (the “VAT”), education tax (the “EDT”), capital gains tax (the “CGT”), stamp duties on bodies corporate and residents, and personal income of members of the Armed Forces of the Federal Republic of Nigeria, members of the Nigeria Police Force, residents of the FCT, and staff of the Ministry of Foreign Affairs.
Part II of the Schedule lists the taxes and levies collectable by the SG which are the PIT payable through Pay-As-You-Earn (PAYE) or direct assessment, WHT and CGT for individuals, including stamp duties on instruments executed by individuals. Part II of the Schedule also includes pools betting and lotteries, gaming and casino taxes, road taxes, business registration fee, development levy for individuals, naming of street registration fee, right of occupancy fee, and market taxes and levies.
Part III of the Schedule lists the taxes and levies collectable by the LG. They are shop and kiosk rates, tenement rates, on and off liquor licence fees, slaughter slab fees, marriage, birth and death registration fees, naming of street registration fee outside the state capital, right of occupancy fee on lands in rural areas, market taxes, motor park levies, domestic animal licence fees, bicycle and other mechanically propelled trucks, cattle tax, merriment and road closure levies, radio and television licence fees (excluding transmitter), vehicle radio licence fees, wrong parking charges, public convenience, sewage and refuse disposal fees, customary burial ground permit fees, religious places establishment permit fees, and signboard and advertisement permit fees.
On May 26, 2015, the Federal Minister of Finance, exercised her statutory power under section 1(2) of the Act by amending the Schedule to the Act through the Taxes and Levies (Approved List for Collection) Act (Amendment) Order, 2015” (the “Amendment Order”).4 The Amendment Order added national information technology development levy to Part I of the Schedule which widened the list of taxes and levies collectable by the FG.5 Additional taxes and levies such as land use charge, hotel, restaurant or event centre consumption tax, entertainment tax, environmental (ecological) fee or levy, mining and quarrying fee, animal sales tax, slaughter or abattoir fees, infrastructure maintenance charge, fire service charge, property tax, economic development levy, social service contribution levy, and signages and mobile advertisement were added to Part II of the Schedule.6 Part III of the Schedule was amended to include wharf landing charge as part of the taxes and levies reserved for the LG.7
3. The Validity of the Taxes and Levies (Approved List for Collection) Act
In many instances, provision(s) of the Act and the Amendment Order have been brought to the attention of Nigerian courts for judicial scrutiny. Not only that, but there has also been an avalanche of academic papers by tax practitioners, consultants and teachers questioning the validity of the Act.
Nigeria practices federalism and governmental power is tiered among the FG, the SG and the LG.8 Accordingly, the legislative power of the government is also tiered among these tiers of government. The National Assembly is vested with the legislative powers of the Federation by which it can validly make laws with respect to matters in the exclusive legislative list.9 It may also exercise legislative power on any matter in the concurrent legislative list to the extent prescribed by the Constitution, or on any matter as it may be empowered to by the Constitution.10 Matters which do not fall within the purview of the exclusive legislative list are deemed captured in the residual list which is reserved exclusively for the States’ Houses of Assembly. The States’ Houses of Assembly are also empowered to make laws on matters in the concurrent legislative list subject to the inconsistency rule in section 4(5) of the Constitution.11
Items reserved for the National Assembly in the exclusive legislative list include customs duties,12 excise duties,13 export duties,14 stamp duties,15 and taxation of incomes, profits and capital gains.16 Also, by item 69 of the Part I of the 2nd Schedule of the Constitution, the National Assembly can impose tax on all items in the exclusive legislative list.
In the concurrent legislative list, the National Assembly may, in furtherance of its power to collect tax on capital gains, profits and income of persons (not companies) and stamp duties, delegate its power to the SGs or any State authority.17 By implication, the only tax power exercisable by the SGs in respect of the concurrent legislative list is the power to collect and administer capital gain tax of individuals, income tax of individuals (PIT) and stamp duties. In respect of residual list, both the SG and LG have legislative competence to impose, administer and collect taxes on matters outside the exclusive and concurrent legislative lists.18
It is the law that before a tax can be imposed on taxpayer, there must be a statute/enactment conferring such authority with that power.19 The Act is accused of restricting the wide tax powers shared by the Constitution among the three (3) tiers of the government. The Act and the Amendment Order made under it limits the taxes collectable by the FG, SG and LG to eight (8), eleven (11), and twenty (20) respectively, as against the broad powers to legislate on “taxation of income profits, and capital gains” conferred on the FG, and broad collection powers to collect taxes “capital gains, incomes or profits of persons as against companies” conferred on the SG.20 Therefore, where the SG or LG decides to exercise its wide residual legislative competence by imposing a tax to be collected by its designated authority, the ruminating question that comes to mind is that such latter law will be invalid in the face of section 1(1) of the Act.
Section 1(1) of the Act arrogates the Act higher than that of the Constitution, because it was made notwithstanding the provisions of the Constitution. By the provisions of section 1(1) of the Constitution, section 1(1) of the Act is unconstitutional.
Footnotes
1 Chimezirim Echendu, ‘Impacts: Issues Arising from the Invalidation of the Taxes and Levies (Approved List for Collection) Act in Uyo Local Government Council v. Akwa Ibom State Government & Anor (2020) LPELR-4961 (CA)’ (2021) https://www.mondaq.com/nigeria/tax-authorities/1049470/impacts-issues-arising-from-invalidation-of-the-taxes-and-levies-approved-list-for-collection-act-in-uyo-local-government-council-v-akwa-ibom-state-government-anor-2020-lpelr-49691-ca accessed on November 28, 2025.
2 (2025) 16 NWLR (Pt. 2012) 427
3 Kabiru Isa Dandago, ‘Utilizing Approved Taxes and Levies Collection Act 2004 for Effective Revenue Generation at States Level: The Roles of Chartered Accountants’ in Tax Management and Compliance in Nigeria (OGE Business School, 2020) 562-484 https://ngfrepository.org.ng:8443/jspui/handle/123456789/2362?mode=full accessed on November 28, 2025.
4 Chukwuemeka Eze, ‘Levies (Approved List for Collection) Act (Amendment) Order, 2015: Harmonisation or Legalisation of Multiplicity of Taxes and Levies’ (Business Day, August 13, 2025) https://businessday.ng/news/legal-business/article/levies-approved-list-for-collection-act-amendment-order-2015-harmonisation-or-legalisation-of-multiplicity-of-taxes-and-levies/#google_vignette accessed November 28, 2025.
5 Schedule to Taxes and Levies (Approved List for Collection) Act (Amendment) Order, 2015, paragraph 2
6 Ibid, paragraph 3(a)
7 Ibid, paragraph 4
8 Aderonke Majekodunmi, ‘Federalism in Nigeria: the Past, Current Peril and Future Hopes’ (2015) 9(2) Journal of Police and Development Studies, 113 https://www.arabianjbmr.com/pdfs/JPDS_VOL_9_2/10.pdf accessed on November, 28.
9 Attorney General of Ondo State v. Attorney General of the Federation (2002) 9 NWLR (Pt. 772) 222 at 333, para-F; Attorney General of Abia State v. Attorney General of the Federation (2002) 6 NWLR (Pt. 763) 264 10 Nzeribe v. Attorney General of Imo State (1996)
10 NWLR (pt. 478) 322 at 334 para-E-F
11 A. G Ogun State v. Aberuagba (1985) 1 NWLR (Pt. 3) 395
12 Constitution of the Federal Republic of Nigeria, 1999, 2nd Schedule, Part I, Item 16
13 ibid
14 Ibid, item 25
15 Ibid, item 58
16 Ibid, item 59
17 Ibid, Part II, Item 7
18 Ibid, section 4(7); Attorney General of Lagos State v. Attorney General of the Federation (2025) 5 NWLR (Pt. 1984) 43, para 105, paras H-B
19 Saviour Archibong, ‘An Overview of Taxation in Nigeria’ (2024) 1 https://papers.ssrn.com/sol3/papers.cfm?abstract_id=4680787 accessed November 28, 2025
20 Constitution of the Federal Republic of Nigeria, 1999 as altered, 2nd Schedule, Part I, Item 59 & Part II, Item 7
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