MANDATE & STATUTORY BASIS
Our mandate
The Service exists by law, collects only what the law approves, and answers to the State Board of Internal Revenue, the State House of Assembly and the Auditor-General. This page sets out exactly where our powers come from and where they stop.
The legal foundation
The Service derives its existence and its powers from the State Revenue Administration Law, which establishes the State Board of Internal Revenue as the governing body and the State Internal Revenue Service as its operating arm. The Law vests in the Service the exclusive right to assess, collect and account for all revenue accruing to the State Government from internal sources, and makes it an offence for any other person or body to collect State revenue without the written authority of the Board.
Above that State law sit two federal statutes that define most of what we may charge. The Personal Income Tax Act (Cap P8, Laws of the Federation of Nigeria 2004, as amended) governs the taxation of the income of individuals, communities, families and the trustees or executors of settlements and estates — and gives the State the right to tax every individual resident within it. The Taxes and Levies (Approved List for Collection) Act sets out, in Part II of its Schedule, the closed list of taxes and levies a State Government may collect. Nothing outside that list may lawfully be demanded from a taxpayer in this State, whatever a receipt may say.
The Constitution of the Federal Republic of Nigeria itself draws the line between federal and state taxing rights. Company income tax, value added tax, petroleum profits tax, customs and excise, and the taxation of residents of the Federal Capital Territory, of the armed forces, the police, officers of the Nigerian Foreign Service and non-residents belong to the Federal Inland Revenue Service. Personal income tax on everyone else, together with the fees and levies in the approved list, belongs to the State.
The statutory instruments we operate under
Each of these is available in full from the Resources section.
| Instrument | What it governs | Key provisions we rely on |
|---|---|---|
| Constitution of the Federal Republic of Nigeria 1999 (as amended) | The division of taxing powers between the Federation and the States | Second Schedule, Part II, items 7 and 8; Section 24(f) |
| Personal Income Tax Act Cap P8 LFN 2004 (as amended) | Taxation of the income of individuals and unincorporated bodies | ss.2, 10A (TIN), 33 (reliefs), 41 (returns), 65–68 (assessment), 70 (withholding), 76 (interest), 81 (PAYE), 85 (tax clearance), 94–97 (offences) |
| Taxes and Levies (Approved List for Collection) Act | The closed list of what a State may collect | Part II of the Schedule — 25 approved State taxes and levies |
| State Revenue Administration Law | Establishment, powers and administration of the Service | Establishment of the Board; powers of distraint; appointment of collecting agents; the Revenue Court |
| State Hotel Occupancy & Restaurant Consumption Law | Consumption tax on hotels, restaurants and event centres | Rate, collection agent obligations, remittance date, penalties |
| State Land Use Charge Law | Consolidated property charge | Assessment formula, exemptions, objection window |
| Stamp Duties Act Cap S8 LFN 2004 | Duty on instruments | Section 4(2) — State competence over instruments between individuals |
| Capital Gains Tax Act Cap C1 LFN 2004 | Gains on disposal of chargeable assets by individuals | Section 2 — administration by the relevant tax authority |
| National Road Traffic Regulations | Vehicle registration, licensing and roadworthiness | Registration, plate allocation, roadworthiness testing, driver licensing |
| Annual State Appropriation Law | The revenue targets the Service is funded and measured against | Revenue estimates by head; cost-of-collection appropriation |
The functions the law assigns to us
Set out in the State Revenue Administration Law and reproduced here in plain language.
- Assess every person chargeable with tax in the State and issue notices of assessment.
- Collect, recover and pay to the designated account all taxes, fees, levies, fines and rents due to the State.
- Maintain the taxpayer register and issue the Taxpayer Identification Number to every taxable person.
- Administer the Pay As You Earn scheme and audit employer remittance schedules.
- Issue tax clearance certificates to taxpayers who have discharged their liability.
- Account for all collections to the Accountant-General of the State each month.
- Advise Government on revenue policy, rates and the drafting of revenue legislation.
- Appoint, supervise and monitor accredited collecting agents and banks.
- Carry out tax audits, investigations and, where necessary, enforcement and prosecution.
- Collaborate with the Federal Inland Revenue Service and the Joint Tax Board on national tax matters.
- Publish, at least annually, a report of the revenue collected and its application.
- Educate the public on their tax obligations and the reliefs available to them.
What the Service may not do
No revenue officer may demand or receive cash at a taxpayer’s premises. Every payment must be made through an accredited bank, POS terminal, transfer, USSD or online channel, against a payment reference, and must produce an electronic receipt.
No charge may be collected that does not appear in the published schedule of revenue heads with a code and a statutory basis. If you are presented with a demand for something not on that list, refuse it and report it on the whistleblower line.
No premises may be sealed and no goods distrained without a prior demand notice, the expiry of the statutory notice period and the written authority of the Executive Chairman.
No revenue officer may vary an assessment informally. An assessment is varied only through the objection and appeal procedure, in writing.
How a liability becomes revenue
The seven-stage lifecycle every naira the Service collects passes through.
Enumeration
Field officers capture premises, properties, vehicles and economic activity with geo-coordinates and photographs. Captures are verified before they enter the register.
Registration
The taxpayer is registered, a TIN is issued and business premises are recorded against it. Registration is free and, for individuals, can be completed entirely online.
Assessment
Chargeable income, turnover or value is determined under the relevant law. The computation, the reliefs applied and the resulting liability are shown on the face of the assessment.
Billing
A demand notice is issued carrying a unique reference, the revenue head code, the amount, the due date and every channel through which it may be paid.
Collection
Payment is made at a bank branch, POS terminal, online, by transfer, by USSD, through Remita or by direct debit. Funds settle into the State treasury single account.
Reconciliation
Bank settlement files are matched against the revenue ledger daily. Unmatched items are queried within 24 hours and cleared within five working days.
Enforcement
Where an undisputed liability remains unpaid after the statutory notice, recovery proceeds by distraint, garnishee order, premises sealing or prosecution.
See exactly what the law allows us to charge
Every approved revenue head, with its code, its category, the collecting MDA, the amount or rate and the statutory instrument that authorises it.