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The Historical Evolution of Taxation in Nigeria: Indigenous Institutions, Colonial Extraction, and Contemporary Reform

Patrick Edet Akinninyi, UwakmfonAbasi J. Simeon

Abstract

Nigeria’s tax system has undergone significant historical transformations, yet domestic revenue mobilization remains comparatively weak. This study examines the historical evolution of taxation in Nigeria and explains the institutional foundations of the country’s contemporary fiscal structure. Using historical institutional analysis informed by fiscal sociology, the study evaluates Nigeria’s taxation system across four periods: pre-colonial fiscal institutions, colonial fiscal centralization, post-independence constitutional federalism, and contemporary reform initiatives since 1999. Evidence from historical and policy sources indicates that pre- colonial fiscal systems generated locally legitimate mechanisms of revenue mobilization but lacked territorial integration and administrative standardization. Colonial administration subsequently introduced centralized taxation structures designed primarily to finance imperial governance, replacing indigenous legitimacy with extractive fiscal administration. The expansion of petroleum revenues during the 1970s further reduced reliance on broad-based domestic taxation and reinforced fiscal centralization. Although recent reforms aim to strengthen tax administration and expand non-oil revenue mobilization, historical institutional legacies continue to shape administrative fragmentation and compliance constraints. Strengthening domestic taxation therefore requires improved institutional coordination, administrative capacity, and stronger fiscal accountability.

Keywords

taxation historyfiscal institutionsRevenue mobilizationcolonial taxationfiscal federalismNigeria.

References

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