Contentious issues on Value-Added Tax and Sales Tax in Nigeria: A review of conflicting court decisions

Author: Doris Dakda Aaron

ISSN: 2521-2575
Affiliations: Research Fellow, National Institute for Legislative and Democratic Studies, National Assembly, Abuja
Source: Journal of Corporate and Commercial Law & Practice, Volume 7 Issue 2, 2021, p. 1 – 15


Taxation is a universal means of revenue generation by governments worldwide. It is the oldest form of revenue generation. Many countries rely on taxes as an avenue for revenue generation to foster development and improve the welfare of their citizens. There are different types of taxes computed in line with the tax policies of individual countries. Nigeria, like many other countries, relies on taxes alongside other sources of revenue for its recurrent and capital expenditure. The various taxes in Nigeria include value-added tax (VAT), sales tax, company income tax and personal income tax. This article looks at contentious issues arising from the implementation of VAT and sales tax in Nigeria. The article adopts doctrinal methodology by reviewing case law and tax legislation, and using a comparative analysis approach. The article considers the provisions of the law and their applicability in the Nigerian federal system of government. The article also considers the powers of the federal and the state governments in respect of VAT and sales tax. The article finds that a major challenge in the implementation of VAT and sales tax in Nigeria is the debate between the states and the federal government of Nigeria about which tier of government has power over VAT and sales tax. The article recommends that states should be allowed to have power over VAT and sales tax alongside the federal government, as occurs in other federal settings. In addition, the end users of most consumable items are domiciled in the various states of Nigeria.