Journal of Legal, Ethical and Regulatory Issues (Print ISSN: 1544-0036; Online ISSN: 1544-0044)


State Tax Sovereignty and Constitutional Transfers: Implication for Regional Development

Author(s): Cordelia Onyinyechi Omodero, Michah Chukwuemeka Okafor

The need for regional development has motivated this study. This study examines the effect of states taxing rights and constitutional transfers on the six geopolitical regions in Nigeria. The studies covers a period from 2000 to 2020 and obtain data on state independent tax revenue, constitutional transfer, share of revenue from Value Added Tax (VAT), grants and regional development from the Central Bank of Nigeria Statistical Bulletin, 2020 edition. The data obtained on the variables mention are analyzed using the multiple regression method of analysis which provides empirical evidence that state independent tax efforts and share of federally collected VAT revenue have significant positive impact on regional development in Nigeria. On the contrary, constitutional allocations and grants do not have material effect on regional progress. The recommends amendment to the Nigerian revenue sharing formula in the favour of states. Furthermore, states are encouraged to embark on innovative projects that are capable of attracting both foreign and local grants for the expansion regions. This study also considers the widening of the horizon of the states’ taxing powers while corruption should be eradicated.

Get the App