The Federal High Court in Abuja has issued a landmark judgment declaring that small and medium-scale enterprises (SMEs) cannot be subjected to double taxation by both state and local government authorities.
Justice Ibrahim Danladi, who presided over the case, emphasized that the practice of collecting multiple levies for the same business activity discourages entrepreneurship and contradicts constitutional provisions on taxation.
“This judgment reinforces the need for clear tax structures that support business growth rather than stifle it,” Justice Danladi stated during the ruling.
The case was filed by a coalition of SMEs operating in Lagos, who complained of being charged both “environmental levies” and “business premises permits” by different authorities. The ruling now compels governments across the federation to harmonize levies into a single structure.
Legal experts have hailed the judgment as a positive step toward ease of doing business in Nigeria. However, they also caution that enforcement will be key, as local councils may resist losing a vital revenue stream.
Observers believe the decision could set a precedent for other developing countries facing similar tax conflicts, making Nigeria an example in regulatory clarity for small businesses.
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