18 Jan



:: We have noted earlier that there can be no taxation without representation. This representation is done through an enactment in a written law by the people’s representatives called Legislators-See the Bill of Rights Act 1688, S.A.Authority V Regional Tax Board This rule is necessary to prevent government’s intrusion into individual’s property, to prevent corruption and arbitrariness.

:: Taxation is not the same as a fee or regulation.

:: Taxation is a compulsory imposition on a property, person or activity by government through the legislature for public purposes. A regulation on the other hand is a rule made by the government to preserve public order, health and justice. A fee/charge is payment for goods and services.

:: A fee should be reasonable-Mapleview Estate Inc V City of Brown City.

:: A fee must have statutory basis and must be regulated-AG V Wilts United Diaries. In Davey Paxman V Post Office, the court ordered that the plaintiff be refunded for the Wireless registration fee charged since there was no statutory regulation to that effect.

:: The problem here is that government ministries and parastatals (as we shall see) usually charge administrative fees in circumstances that may amount to taxation.


In Mapleview Estate Incorporation V City of Brown City, the court noted that following must be considered:

  • A Fee primarily seeks to regulate while a tax primarily seeks to raise revenue[1].
  • A fee/charge is voluntary (as the citizen may decide not to pay it and would not enjoy the services) while a tax on the other hand is compulsory[2] where the taxpayer clearly falls within its provisions.
  • Quid Pro Quo: simply means something done in exchange for something else. E.g. paying toll gate fees so that you can pass, paying electricity bills in return for power supply, water bills for water supply, waste bills for waste disposals… all these constitute fees. Under tax, there is no quid pro quo. Meaning that tax is imposed without any direct benefit conferred on the taxpayer. The benefit can be regarded as conferred on the public-Home Builders Association of Greater Des Moines V City of West Des Moines. In Bolt V City of Lansing, the court held that since sewage treatment services were rendered in return for the payment, the payment constituted a fee.
  • Uniformity: Charges and fees are generally uniform rather than discriminatory. E.g. N200 parking fee for both Aliko Dangote’s car and Mr John’s car. While taxes especially income tax may be imposed based on the ability of the taxpayer to pay. Richer taxpayers would usually pay more. Although exceptions may exist. E.g. in VAT, a fixed rate of 5% is imposed.

:: Abuse of regulatory power: occurs where regulatory power is (deliberately) utilized primarily to raise revenue. Where impositions with a substantial feature of a tax is being clothed in the guise of a fee. Where a fee places undue emphasis on revenue generation. A fee or regulation must seek primarily to regulate and specific services must have been provided in return.

Abuse is manifest in the following:

Registration of Political parties by INEC. Which the Supreme Court accepted in INEC V Musa in respect of N100,000. As Niky Tobi JSC noted that the government is not father Christmas. Therefore political parties are to pay the N100,000 registration fee. The effect of this decision is that registration at present (2015) is N27 million. This places undue reliance on revenue therefore amounting to taxation in the guise of administration.

  • Governor’s consent: by the combined provisions of Sections 1, 21 and 22 of the Land Use Act (and Savannah Bank V Ajiloh) radical title over land is vested in the governor of the State and his consent must be sought before a holder of a right of occupancy can alienate land. There was a time when consent fee kept rising till it reached 30% of the property value.
  • High Court Fee (of Lagos State): High Court established under Section 270 of the 1999 constitution and Section 274 empowers High Court judges to make rules for court. Pursuant to this, Paragraph 1 Schedule A of the High Court of Lagos State (Fees) Law provides for fees in respect of recovery of certain sums. This fees graduate with the value of the sum. This is discriminatory and amounts to taxation in the guise of regulation.
  • Nigerian Tourism Development Levy: Hospitality establishments (Like Hotels) require registration certificate to operate. Regulation 1 NTDCAct charges registration Fee based on number of rooms and total sales. This is discriminatory and therefore a taxation in the guise of regulation.
  • Examination Re-assessment Fee by the Council of Legal Education: was set at 217,000. Law School Students who wanted their scripts to be re-marked had to pay over 200 thousand Naira. This is unjust and amounts to an abuse of regulatory power.
  • The cost of registration with NAFDAC.
  • The JAMB Scratch Card fee for checking result: is primarily aimed at revenue generation thereby constitutes an abuse of regulatory power.

This abuse of regulatory power may be attributable to the fact that:

  • Regulatory bodies are not properly funded.
  • Regulatory bodies are not properly supervised by the legislators, members of the public and other stakeholders.
  • Poor management and improper exercise of administrative discretion.

This abuse can be curbed by constant supervision, express limitation by the enabling statute and proper funding to enable the Parastatals recoup expenditure.


[1] In practice, overlaps may exist, tax seeks to regulate for social engineering (for example sin Taxes)

[2] Tax can be optional where a person choses to legally fall outside the scope of taxing statute for example refusal to purchase luxurious goods with VAT.


Quite eccentric really

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