Tax Assignment and Revenue Sharing in Nigeria: challenges and options

Abstract

This paper build on the history as well as the current legal framework of tax assignment and revenue-sharing in Nigeria to identify the challenges while also drawing from the theoretical framework for policy options which will provide for a stable federal system in Nigeria. The paper recommended among others the strengthening of states internal revenue bases, adjustments on the vertical and horizontal revenue-sharing formula, effective compliance with the allocation of the mandatory 10% of states’ internally generated revenue. The paper concludes that changes to the existing tax assignment and revenue-sharing arrangements will go a long way in protecting our nascent democracy.