Nigeria’s House of Representatives has opened debate on a proposed constitutional overhaul aimed at untangling the country’s overlapping tax regime, curbing double taxation, and restoring clarity to revenue powers across federal, state, and local governments.
The legislation, formally titled – A Bill for an Act to Alter the Constitution of the Federal Republic of Nigeria, 1999 (as Altered), to Clarify the Taxation Powers of the Federal, State, and Local Governments; Define the Scope of Taxes and Levies Collectible by Each Tier of Government; Prevent Multiple Taxation and Unlawful Outsourcing of Revenue Collection; and for Related Matters (HB.2545), is spearheaded by Deputy Speaker Rt. Hon. Benjamin Okezie Kalu and co-sponsored by six other lawmakers: Hon. Chris Nkwonta, Hon. Tolani Shagaya, Hon. Daniel Asama Ago, Hon. Alex Egbona, Hon. Nkemkanma Kama, and Hon. Joshua Audu Gana.
Presenting the bill’s core principles, Kalu argued that Nigeria’s current fiscal framework is riddled with “confusion and conflict,” with different government levels imposing similar levies on the same citizens and businesses.
High-profile disputes over Value Added Tax (VAT), Stamp Duties, and Personal Income Tax have repeatedly strained federal-state relations, he said.
Kalu also condemned the widespread practice of hiring private consultants to collect taxes, labeling it a source of corruption, citizen harassment, and revenue leakage.
Key Provisions in the Proposed Amendment
If enacted, the bill would introduce the following reforms:
– Stamp Duties Split: Corporate transaction duties remain federal; individual transaction duties shift to states.
– VAT on Exclusive List: Elevates VAT (or a consumption tax) to the federal Exclusive Legislative List for nationwide uniformity.
– Ban on Outsourcing: Prohibits governments from delegating revenue collection to private firms or consultants.
– Tax Cap: Limits any individual’s annual exposure to a maximum of nine distinct taxes or levies on income, consumption, or property.
– Local Government Restraint: Curbs excessive levies on traders, artisans, and small enterprises.
Kalu told lawmakers the changes would reduce intergovernmental friction, improve budget forecasting, and rebuild public trust in taxation. “Every naira collected, shared, or spent must be lawful, traceable, and transparent,” he stressed.
The bill has been sent for second reading and referred to the Committee on Constitution Review for further scrutiny.
Supporters say the overhaul could mark a turning point for Nigeria’s fiscal governance, delivering a cleaner, more predictable tax environment for citizens and investors alike.