The Consequences of Non-Observance of True Fiscal Federalism in the federal System of Government: Nigeria Stamp Duties’ Act and Collection Power in Perspective

Abstract

In the Federal system of government, legislative power is shared between the Federal government
and the federating units. Nigeria operates federal system of government but in-evitable conflict
exists in its system between the Federal Government and State Government and even within the
Federal Government agencies. This paper examined the consequences of non-observance of true
fiscal federalism in the Federal System of Government; and to achieve that, the paper looks at the
Nigeria Stamp Duties’ Act and collection power of the Federal and State Governments and the
agencies of the Federal Government. The paper used doctrinal research method whereby primary
and secondary sources of materials were examined for the study. The paper found that even though
the tax is viable in the Nigerian fiscal system considering the need for the increase of the revenue
sources in Nigeria. But the conflict of the tiers of government and their agencies on imposition
and collection of the stamp duties tax is in-evitable and may affect the achievement of government
revenue generation. Also the taxpayer may use that conflict as a reason for not paying the tax as
at when due. The paper, therefore, recommends for amendment of all the Stamp Duties Acts and
come up with a unified Act that would observed the true fiscal federalism on the powers of the tiers
of government and their agencies.