Administration of Value Added Tax (Goods and Services Tax) and Fiscal Federalism in Nigeria: Lessons from Australia, Canada, the USA, India and Ethiopia

Abstract

One of the incidences of federalism is that taxing powers are shared between the federating units. Thus fiscal federalism affects the administration of consumption taxes in federal systems. The implication of fiscal federalism under the Nigerian constitution on consumption taxes has generated some controversies over the years. The question has been whether the constitution allows a dual level administration of consumption taxes by the federal and states governments or whether the powers are solely vested in the federal government. This article argues that there is a hiatus in the constitution as it is unclear who has the powers to impose consumption taxes in Nigeria. The article will propose necessary constitutional amendment drawing from the lessons the experiences other federal systems like Australia, Canada, the United States of America, India and Ethiopia present.