Taxation is the lifeblood of every government. It funds infrastructure, healthcare, education, and public services. For subnational governments like Edo State, effective taxation is critical to achieving financial autonomy and sustainable development. Yet, the current tax framework in Edo State remains outdated, inefficient, and inadequate to meet the needs of a rapidly evolving economy. There is an urgent need for comprehensive tax reform and no better benchmark exists than Lagos State.
Simply put, this article is suggesting that Edo State need to reform its tax laws in line with Lagos State is a call for harmonization, efficiency, and potentially increased revenue generation. This is also a wakeup call for the state to overhaul it tax laws as the state prepare to reform it laws to meet with the current societal demand
No doubt, the Constitution of the Federal Republic of Nigeria, 1999 (as amended): This is the supreme law. Item D7 of the Second Schedule grants the National Assembly the power to legislate on taxation of incomes, profits and capital gains, subject to exceptions. States have concurrent powers to legislate on certain taxes. Taxes and Levies (Approved List for Collection) Act: This Act specifies which taxes are collectable by the Federal Government, State Governments, and Local Governments.
This is crucial and a big cash cow for Lagos State and Edo State Government must be quick to revamp its tax collection mechanisms here. The Personal Income Tax Act (PITA): Governs the taxation of individuals, employees, and self-employed persons. Both the Federal and State governments have roles in administering PITA. Companies Income Tax Act (CITA): Deals with the taxation of companies’ profits. This is primarily a federal matter, though States can levy related taxes (e.g., stamp duty). Value Added Tax Act (VAT Act): Governs the imposition and collection of VAT, which is largely a federal matter.
At this juncture, I must admonish that this paper does not call for a blind duplication of Lagos State model. Rather, it proposes a context-sensitive adaptation of proven strategies within the bounds of Nigeria’s constitutional and fiscal federalism. The stakes are high, but so too is the opportunity for transformation.
I am indeed worried about the archaic nature of the Revenue Administration Laws of Edo State, this is crucial as the Edo State’s specific tax laws, revenue administration procedures, and established tax authority are anachronistic. This is indeed a wakeup call for the State to also address tax assessment, collection, enforcement, and dispute resolution. Due to time constrained I shall not be to analysing the specific provisions of this law to understand the current situation in Edo, since the Relevant Finance Laws (Federal and State) Finance laws often amend existing tax laws and introduce new ones. We also know that Edo State’s annual Appropriation Laws often include relevant tax related clauses.
Permit me a brief personal note. I am Kanabe Sani Alunegbe, a proud indigene of Iviukwe, Etsako East Local Government Area, Edo State. I hold an LLM in Taxation Law from the University of Lagos, and I am a Barrister and Solicitor of the Supreme Court of Nigeria, Notary Public, and a member of both the Chartered Institute of Arbitrators (UK) and the Chartered Institute of Taxation of Nigeria (CITN).
I have practiced extensively in tax litigation, appearing before the Tax Appeal Tribunal, Federal High Court, and Court of Appeal, representing both public and private sector interests particularly in federal tax matters.
It will be largely unfair if I fail to tell the Lagos State Tax Success Story. Lagos State stands as Nigeria’s beacon of fiscal independence. While most states rely heavily on federal allocations, Lagos has consistently led the nation in Internally Generated Revenue (IGR), raking in over ₦1.3 trillion annually, (2024 statistics). This financial success is not accidental and a miracle; it is the direct result of deliberate, structured reforms in its tax system.
I must be critical here by saying that Lagos State restructured its tax administration under a robust legal framework, established the Lagos State Internal Revenue Service (LIRS) as an autonomous body, and embraced digital technology to ease tax compliance. These efforts created a transparent, predictable tax environment that encourages both residents and businesses to fulfil their obligations.
As a pragmatic person and always a forward looking individual, it no news that Edo State, blessed with a vibrant informal sector, natural resources, a growing SME base, and a digitally savvy youth population, has immense untapped tax potential. However, the state’s tax laws are fragmented, many still rooted in pre-democratic era frameworks. The Edo State Internal Revenue Service (EIRS) lacks full operational independence, and the state’s digital tax infrastructure is limited and underutilized.
As a result, Edo’s IGR lags far behind its potential, creating a heavy dependence on monthly federal allocations, which are increasingly unreliable given oil price volatility and global economic pressures.
I must make a case here for the state Government by saying pronto that Reforming and Aligning Edo State’s tax laws with Lagos State’s model is not about copying policies blindly; it’s about embracing a framework that has proven to work in Nigeria’s complex socio-economic environment. Key areas for reform should include, legal harmonization, autonomy for EIRS, digital transformation, informal sector integration, and lastly public awareness.
As a practitioner passionate about Edo State development, I am offering pro bono (free) legal and policy advisory services to the Edo State Government to support this reform effort. With proper reform, Edo can double or triple its current IGR within a few years. This means more roads, better schools, reliable healthcare, improved internal security, and job creation all without reliance on unstable oil revenues or federal handouts.
Furthermore, a transparent and efficient tax system with the use of technology will boost investor confidence, attract more businesses to the state, and stimulate long-term economic growth and Edo State will be on a right track to eldorado.
Reforming Edo State’s tax laws along the lines of Lagos State’s model requires a comprehensive and well-planned approach. It involves reviewing existing laws, investing in technology, strengthening enforcement, and promoting taxpayer education. Critically, all reforms must comply with the Constitution and other relevant federal laws. The goal is to create a more efficient, transparent, and equitable tax system that generates increased revenue for Edo State’s development. The specific Edo State Revenue Administration Law must be consulted to understand the exact requirements for reform.
The Edo State Government stands at a fiscal crossroads. Reforming the state’s tax laws in line with the Lagos State model is not just advisable, it is necessary. It is time for bold leadership, strategic partnerships, and a commitment to sustainable development through tax reform. With political will, stakeholder engagement, and technical expertise, Edo can chart a new course, one where it thrives financially, delivers on its promises to citizens, and serves as a model for other states to follow.
Thank you.
KANABE SANI ALUNEGBE ESQ
“Notary Public”
ND (Accounting), LLB, BL, LLM (Taxation), ACIArb (UK), CITN.
Barrister & Solicitor of the Supreme Court of Nigeria
Managing Associate
Abiodun Adesanya & Co.,
Email: s.kanabe@abiodunadesanya.com
Phone: 0806-627-1440