Nigeria: Delegated tax collection authority held unconstitutional (Federal High Court)

Nigeria: Delegated tax collection authority

A 2020 judgment from the Federal High Court (sitting in Lagos) rejects and nullifies an order from the Minister of Finance regarding the schedule of federal taxes subject to collection by the various state governments.

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The case is: The Registered Trustees of Hotel Owners and Managers Association of Lagos v. Attorney-General of the Federation & Minister of Finance

At issue was an order—the “Schedule to the Taxes and Levies (Approved List for Collection) Act (Amendment) Order, 2015”—issued five years earlier regarding the authority for the approved list of taxes and levies for collection. In issuing this order, the Minister of Finance expanded the tax and levy collection schedule by including the hotel, restaurant or event centre consumption tax to the list of taxes to be collected by the various state governments. In turn, the states (including the state of Lagos) enacted consumption tax laws and began to collect the tax from businesses.

In the case brought by the businesses to challenge the order, the high court held that the authority to legislate is a function of the parliament and that this authority cannot be shared with or delegated to another body. Therefore, the delegation of the legislative function to the Minister of Finance was held to be a violation of the constitutional principle of separation of powers. The high court concluded that the schedule could not be amended except by the parliament, and that the order was unconstitutional, null, and void.


Read a September 2020 report [PDF 893 KB] prepared by the KPMG member firm in Nigeria

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