COMPLETE SCHOOL PROJECT TOPICS & MATERIALS :
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2.0   Development of Local Government in Nigeria 
The evolution of local government in Nigeria has under gone a lot of changes. These are all geared towards making the local government a system that could serve the purposes for which they are created, before the emergence of the British Colonial/ Administration; various communities in Nigeria were governed through the instrumentality of their traditional political Institutions. These institutions were anchored on the people’s habits of thought, prestige and custom which are adapted to meet the new conditions for general development of their areas.
Local authorities were empowered to charge and collect developmental rates based on a certain percentage of the income of the rate payers. The council enjoyed the social autonomy of providing certain social services to the community, for instance the local government was vested with the responsibility of healthcare services delivery with the transfer of primary healthcare delivery system.
In the 1950s, election was introduced according to the British model in the western and eastern parts of the country with some measure of autonomy in financial, general administration and in personnel which gave rise to tide of progress, growth and development experienced in the local government.
Prior to this period, the British introduced native courts chaired by Chiefs, native treasuries where taxes collected from people were paid in for use by the local government. Native authorities were created with traditional rulers at the head of each authority. The traditional rulers continued to dominate local government’s administration until the military took over power. In 1966, from then the powers of the traditional rulers, especially in the northern region, reduced gradually. The newly created states in the Northern region increased popular participation in local government administration. Larger local authorities were broken to smaller ones and native authorities were changed to local governments.
The local government reform of 1976 provided the guidelines for local governments in Nigeria. The reform created large-sized local government areas throughout the federation based on a certain minimum population requirements, these results in uniform local government areas. The federal government for the first time was involved in the funding of local governments. The local government gets statutory percentages share of Federation accounts and state revenue. The local government was made a third tier of government, which means the local government has its own powers. There were about 301 local government councils as at 1976.
In 1986, the Babangida Administration made local government an effective third tier of federal system, introduced reforms aimed at enhancing their autonomy and strengthening their administrative framework. All elected councilors now constitute legislative arm of the local government which the executive arm consists of the chairman and vice-chairman and supervisory councils.
The local government witnessed several reforms between 1991 to 1992. The reforms snows a fundamental implications for local government administration, especially in regard to the reforms to the local government service. 589 local government areas were in existence as of 1991 local government reforms and there was establishment of the executive chairmanship of local government with functions firmly entrenched in schedule four of the constitution.
The federal government established the local government service commission aimed at preserving the independence of the local government staff. The federal government increased the local government share of the federation accounts to twenty percent. This increase in revenue base gave local governments high degree of confidence and power to equip them for the challenging role, facing them.
According to 1999 constitution of Nigeria, not only recognizes, but also guarantees the existence of a more powerful and independent local government areas section 162 of the 1999 constitution guarantees the right of the local government to receive statutory allocation of the revenue from both the federation account and state resource. The fourth, schedule of the same constitution spells out the functions of the local government.
The federal government increased the local government share of the federation accounts to twenty-five percent. In the present local government administration, there are about 774 local government areas in Nigeria with the rights and power of providing certain social services to the communities, such social services like provision of healthcare centers, electrification, provision of pipe bore water and accessible roads etc.

2.1   Sources of Taxation in Local Government
In an attempt to marshal out the functions of the local government, the fourth schedule of the constitution of the federal Republic of Nigeria 1999 implicitly specified some of these sources of taxation to the local government.
However, Ogunna (1996). Posited that generally the local government has eight main sources of revenue which includes rates, grants, statutory, allocations, fees and charges, fines, earnings and profits, loans and miscellaneous.
1.     RATE
As one of the independent sources of revenue, people residing within a local government area pay some money to it in form of rates. Rate is, thus a local tax of the local government which is of three types namely property rate, special rate and capitation rate otherwise known as poll tax. Property rate is a fixed percentage amount of the current value of a private property levied on the owner of such a properly. Capitation rate which is also a fixed amount of money levied on all rateable adults living in the local government. It is not only fixed but equal for every payer and like the property rate, it is paid annually.
As a flat rate, it is generally low so that the low income people can conveniently pay.
Special rate is a fixed amount meant to be paid by all rateable adults residing in the local government area. Special rate is usually levied for specific and priority projects like Education, water supply and rural electrification which the local government has inadequate fund for its provision.
2.     Statutory Allocation
As the third tier of government, the local government receives statutory allocation from the federation account just like the state and federal government. This share of revenue is as fixed by law, part of it also comes from the state government total internally generated revenue based on percentage formula because it is fixed by law, it is not voluntary but mandatory and does not depend on the whims and caprices through a legitimate process of change of the law that provides it. Statutory allocation is definite and certain.
3.     Fines
These are penalties imposed by the customary courts on individuals for the contravention of the bye-laws of the local government to regulate and control services allocated to them within their areas of jurisdiction. Note that revenue accruing to the local government through this source is relatively very insignificant.
4.     Earning and Profits
These are profits, interests and premiums accruable to the local government from its investment of funds in private or public economic ventures.
In other words, they are money realized by the local government from commercial ventures and industrial establishments such ventures includes mass transit services, soap industry, bakery, Agricultural farms, shares owned in companies. If such business is effectively managed with minimum local government interference and political influences, the higher revenue could be realized.
5.     Fees and Charges
Revenue is generated through payments for the services which the local government provides such fees are in some cases designed to regulate and in other cases to maintain these services.
Fees and charges are imposed and revenue realized from the issuance of various types of licenses like bicycle, wheelbarrow, canoe and cart licence, others are charges on bakeries, sale of liquor in restaurant and public places, errection of sign-boards registration of births and marriages, motor parks and markets, personal identification, public urinary and toilets etc.
The imposition of fees and charges on these services by the local government always requires enabling laws for them to be lawful.
6.     Grants
The federal and state government give grants often called grants-in-aid, to the local government to enable it discharge its functions effectively particularly in the area of the provision and maintenance of certain basic amenities for the people such basic amenities like water and electricity supply, building of educational and health facilities. The maintenance of roads attract grants four main types of grants which includes general or block grant, specific grants, equalization grant and matching grant.
Local governments are expected and are indeed meant to embark on certain development projects that are listed as priorities of government. Consequently any local government of that embarks on such priority projects is given a matching grants which is designed to simulate and encourage development.
7.     Loan
Local governments are empowered to obtain loans from the federal, state and other local government. They are also allowed to raise loans from financial institutions like bank and from individuals. They raise loans for incurring capital development projects that are within their statutory functions.
Educational, Agricultural and Industrial development Projects, drainage schemes, health and market development are good examples of developmental projects for which loan can be raised.
The fact is that no local government can make any reasonable giant stride in rapid community development without borrowing. It is however important to note loans are necessity provided that they are prudently applied on capital projects for which they are obtained, on capital projects which are expected to be of immense benefits to the people including the coming generation which incidentally are reasonably expected to pay for such loans in future, our of the rates and other forms of taxes they will pay.
8.     Miscellaneous
Revenue can be generated from the payment of levies like developmental and educational levies. Money can also be realized from rents paid for using any land or building belonging to a local government. Gifts and donations from individuals, philanthropists and corporate bodies also form sources of revenue of the local government.
In conclusion, local government are empowered to generate revenue to enable them carryout their statutory and permissive functions. It is therefore necessary to enhance taxation of the local government to enable them, carryout their duties.
2.2   The Need for Taxation in the Development of Local Government Areas.
According to Abba Ugoo E. (2008) the need for taxation can’t be overemphasized, the management of revenue generated in the local government constitutes the crucial and central component in the Administrative process of the local government. This is largely so because finance determines the services rendered by the local government.
The following gave rise to the need for taxation in the local government:-
1.     To Solve Diverse Functions Allocated to the Local Government
In the same way, where the local government is allocated diverse functions, as it now has in Nigeria, some of which are large in scope like education, health, water supply and rural electrification. The revenue sources to be provided should correspondingly be large in scope, viable and rich in content to match the diverse functions.

2.     To be able to pay Their Highly Skilled Personnel.
Related to the above is a wide variety and meningitides of functions require a large body of high skilled, professionally trained and technically competent staff that must also be regularly motivated. The employment of such staff would necessitate the purchase of a lot of costly equipment and materials for use in the discharge of their duties.
3.     To Tackle Large Territorial Landmass and Population of the Local Government Area.
Most local government in Nigeria are very large both in terms of territorial and population sizes, in such a circumstance, a greater need for revenue arises to enable such a local government cope with the developmental problems of such a large area and at the same time be able to meet satisfactorily the diverse needs of the large population.
Adedji (1979) capped it all when he declared that the success or the failure of the local government depend on the financial resources available to the individual local government and the way those resources are utilized. This fact is further recognized and emphasized in the guideline for local government reforms of 1976 which stated that it must be recognized that if meaningful local government is to be expected in Nigeria, much larger financial resources are needed in the development of such local government area.
2.3   The Problems of Taxation
Local government     in Nigeria enjoyed an improved revenue from 1976 till date due to reforms introduced by different regimes all aimed at making local government effective and efficient in discharging statutory responsibilities to the people. This was achieved through increased sources of taxation; this problems is multifarious ranging from over-dependency of local government on statutory allocation of federal and state government, low borrowing capacity, corruption, mismanagement and misappropriation of local government funds, ineffective strategies for enhancing internally generally generated revenue, lack of skilled and technical personnel.