Rebalancing Taxing Powers in Nigeria: The Case of Rivers State

This article critically investigates the constitutional, statutory, institutional, and fiscal arrangements governing the allocation and exercise of taxing powers in Nigeria, focusing on the position of Rivers State within Nigeria’s federal structure. Following decades of hyper-centralised governance under military administration, Nigeria’s fiscal architecture under the Constitution of the Federal Republic of Nigeria 1999 (as amended) exhibits a fundamental structural asymmetry: subnational State Governments bear extensive socio-economic and infrastructural responsibilities but possess severely circumscribed independent taxing powers. The resulting financial subordination forces States to depend heavily on statutory transfers from the Federation Account, eroding fiscal federalism and subnational democratic accountability. This research examines the legal catalyst provided by the landmark decision of the Federal High Court in Attorney General of Rivers State v Federal Inland Revenue Service, which invalidated federal administration of Value Added Tax (VAT) on intra-state supply of goods and services, affirming the residual tax jurisdiction of States. The article evaluates the landmark judicial precedents governing legislative competence, including AG Ogun State v Aberuagba, AG Lagos State v AG Federation, and AG Lagos State v Eko Hotels Ltd, alongside the four legislative Acts comprising the 2025 tax reform package (the Nigeria Tax Act 2025, the Nigeria Tax Administration Act 2025, the Nigeria Revenue Service Establishment Act 2025, and the Joint Revenue Board of Nigeria Establishment Act 2025). Incorporating a substantive comparative legal analysis of subnational fiscal federalism in South Africa and Canada, the article demonstrates how tax collection agreements, explicit constitutional assignment, and revenue-sharing mechanisms can harmonize central coordination with subnational tax autonomy. The article concludes with concrete constitutional, statutory, and administrative reform proposals designed to rebalance fiscal authority in Nigeria while strengthening the internally generated revenue capacity of Rivers State.