“Little else is requisite to carry a state to the highest degree of opulence.. but peace, easy taxes, and a tolerable administration of justice…” -Adam Smith


One ingenious design of the government was to make a central location the capital such that allocations can flow readily to every corner of the federation since the states struggle whenever there’s a hiccup with federal money. Today, I will examine the state tax agent, an institution helping to wean some states off their overdependence on federal funds.


What entitles the states to set up bodies to take our hard-earned money from us? The constitution is the answer. It allows the states to exactcertain tax as an alternative revenue base for the states. It is for this reason that certain state agencies have been established for the administration of tax.


The Personal Income Tax Act(PITA) established the following agents toadminister tax on behalf of the state government:

The State Board of Internal Revenue (the Board)
The State Inland Revenue Service (the Service)
The Technical Committee of the Board
The Joint State Revenue Committee

The first three “agents” are essentially a hydra of one body with the Board as the directing head while the last is a committee of the state agent and local government agent.

The Board and the Service

The Board and the Service are interconnected. The PITA established the Service to be the operational arm of the Board. This implies that the Service is responsible for, among others, the actual assessment and collection of tax, while the Board is to oversee the activities of the Service to ensure they are optimally carried out. It should be noted that since each state of the federation has the power to make laws for tax administration, the structure of the Board and the Service varies from state to state. Kwara state even went a step further by combining the role of the two bodies in a single body known as the Kw-IRS.

Usually, the board comprises:

the Chairman of the Service as the executive head
directors from the Service or the State Civil Service
a Legal Adviser
nominees of the Commissioner for Finance
the secretary of the service.

As the operational arm, the Service represents the “boots on the ground”.Its numerous functions include:

collecting all tax due to the State
adopting measures to ensure tax compliance
investigating cases of tax fraud or evasion
promoting the application of tax revenues to economic development
carrying out awareness campaigns on tax.


The technical committee advises the Board on professional and technical matters and on such other matters as may be referred to the committee, while the Joint State Revenue Committee implements the decisions of the national Joint Tax Board and works to harmonize tax administration in the state.


The state tax agents may just be the key to unlocking the revenue potential of the states if their roles are effectively discharged.

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