How Tax Bases, Expenditure and Revenues are Allocated in Nigeria’s Fiscal Federalism System
Keywords:
Federalism, Jurisdictional population,, skewed, resources, intergovernmental relationship,, federation, state, local.Abstract
This article examines how tax bases, expenditures responsibility and revenues derive in Nigeria are being allocated amongst the three tiers of government (Federal, State, and Local Government) that make up the federation of Nigeria. This is a qualitative research that uses secondary sources of information to genre information for this article. The article shows how resources and expenditures are allocated to different tiers of government quite often known as intergovernmental relationship or popularly known as fiscal federalism. It shows that the central government (Federal government) gets the lion share of the financial resources that is pooled in the federation Account and shared amongst the tiers of government in the federation. The Federal government also receives the lion share from the Value Added Tax (VAT) Account. The allocation of tax bases and expenditure seems to be very much skewed
in favour of the federal government, thereby bringing into question the functionality of the state especially the local government that is supposed to provide the necessary public good and services to the jurisdictional population. The article occasionally posits alternatives cause of action that could yield a better result than what is presently obtainable. It is very much hoped that this article would clear any misunderstanding of the operation of fiscal federalism in Nigeria that would allow a worthwhile criticism for improvement of the system.
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