INTRODUCTION
Section 80 of the Nigeria Tax Administration Act, 2025 (NTAA) imposes a mandatory duty on the Accountant-General of the Federation (AGF) to recover unremitted tax revenues from Ministries, Departments, and Agencies (MDAs) of the Federal Government. The provision requires the AGF to deduct such outstanding sums directly from an MDA’s budgetary allocation once a warrant is duly issued. This warrant must bear the signatures of the Chairman of the relevant tax authority, a judicial officer, and the deduction must be authorized by the Federation Account Allocation Committee (FAAC). The deducted amounts must then be promptly remitted to the appropriate tax authority. Significantly, however, Section 80 contains no corresponding mechanism for State Accountants-General (AGSs) to address unremitted taxes within their respective jurisdictions. This omission raises important constitutional and administrative questions regarding the balance of fiscal authority between federal and state governments in Nigeria’s federal system.
AUTONOMY OF STATES?
The exclusion of State Accountants-General from Section 80 of the Nigerian Tax Administration Act (NTAA) can first be understood through the lens of federalism, which guarantees states a measure of constitutional autonomy. Under the 1999 Constitution (as amended), (the “Constitution”) Nigeria operates as a federation in which each tier of government is expected to exercise control over its own financial resources. A state’s share of revenue from the Federation Account is credited directly to it under Section 162(3) of the Constitution, and those funds are governed by state legislation rather than federal directives. This arrangement reflects a broader constitutional design that states are not mere administrative arms of the federal government but co-equal partners with exclusive authority over their internal fiscal affairs. Against this backdrop, it is unsurprising that Section 80 confers deduction powers only on the Accountant-General of the Federation (AGF), without extending similar authority to state officers.
The Constitution contains robust safeguards for state control over public finances. Section 120(2) of the constitution provides that no funds may be withdrawn from the Consolidated Revenue Fund of a state except in the manner prescribed by the House of Assembly of that state. Section 5(2) vests the executive powers of a state including fiscal administration in the governor, acting through officers such as the State Accountant-General. Therefore, any federal legislation purporting to prescribe how state-level funds are withheld or disbursed could invite constitutional challenge, particularly under Section 1(3) on the supremacy of the Constitution and Section 4(5) thereof, which limits the pre-eminence of federal law to matters expressly set out in the Exclusive Legislative List. Federal taxation itself is an exclusive matter under Item 59 of the Second Schedule, but the internal fiscal management of states is not.
On this reading, the exclusion of State Accountants-General from Section 80 may reflect a deliberate decision to avoid encroaching on state financial autonomy or creating the appearance of federal supervision over state-controlled revenue flows. It preserves not only the separation of powers within each tier of government, but also the constitutional demarcation between federal and state competencies.
ARGUMENT FOR ACCOUNTANTS-GENERAL OF STATES
Notwithstanding the federal emphasis of Section 80 NTAA, there are strong grounds to argue that a similar mechanism should be extended to the Accountant-General of States. The constitutional architecture is particularly relevant when examining the powers granted under Section 80 of the Nigerian Tax Administration Act, 2025. That provision empowers the Accountant-General of the Federation to deduct unremitted taxes directly from the budgetary allocations of federal Ministries, Departments, and Agencies (MDAs). Yet, curiously, no equivalent mechanism exists for state governments: their own Accountants-General are not expressly empowered to enforce tax compliance by deducting unremitted state taxes at source from state MDAs.
However, it can be argued that if the Constitution allows states to legislate on residual matters and even to administer personal income tax under concurrent authority, there is no principled reason why they should be precluded from enacting laws that mirror Section 80 of the NTAA at the states level. Such legislation would not conflict with federal law, nor would it encroach on matters reserved exclusively for the National Assembly. Rather, it would strengthen fiscal discipline within the states and align with the broader spirit of cooperative federalism envisaged by the Constitution.
Furthermore, the Joint Revenue Board of Nigeria (Establishment) Act provides a collaborative framework between the federal and state governments in tax administration. Therefore, just as the AGF deducts un-remitted federal taxes of MDAs, the AGS should be able to deduct un-remitted state taxes from allocations due to MDAs within the state, subject to oversight by the State House of Assembly as required by Section 120 of the Constitution. Such an arrangement would strengthen tax compliance, promote fiscal accountability, and reduce leakages at the state level.
CONCLUSION
While Section 80 of the Nigeria Tax Administration Act, 2025, expressly vests deduction-at-source powers in the Accountant-General of the Federation alone, this centralised approach leaves a noticeable gap in the fiscal architecture of the states. Under Nigeria’s constitutional framework, states enjoy legislative autonomy in residual matters and share competence in certain concurrent tax areas. Within this context, there is no legal or policy reason why state legislatures cannot enact laws conferring similar powers on their own Accountants-General to recover unremitted taxes directly from the allocations of state-level MDAs.
Extending such authority would not only reflect the principle of cooperative federalism but also enhance the efficiency of tax enforcement, reduce leakages, and promote greater fiscal discipline and accountability across all tiers of government. Moreover, with institutions such as the Joint Revenue Board fostering coordination between federal and state tax authorities, empowering states in this manner would complement rather than conflict with the evolving national tax framework.
Please do not treat the foregoing as legal advice as it only represents the public commentary views of the authors. All enquiries on this should please be directed at the authors.
