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          The appreciation of importance of revenue is as old as man’s desire to make expenditure possible to improve his existing environment. Man here embraces individual, government and organization (profitable and non-profitable). The purpose of revenue is therefore, to have individual, organization and government disposal financially to cater for their various well being. What is doubtful is if enough effort has been made over the years by any of the above mentioned categories against generation (realization) of revenue. It is becoming clearer that individual or government which generates its revenue on a weekly basis is likely to future courageously, little or no prospect exist for such bodies.

          Prior to the coming of the Colonial masters, there were some of revenue open to the Northern and Southern regions of the country. These groups of people have centralized system of administration. The bodies led by Emirs and Alafin are the agent that collect revenue from the inhabitants. Also fine and other revenue are taken care of by these bodies. Development plans were embarked upon through communal efforts.

          The Colonial masters made the work simple for them because they modified the work for these payers of the revenue to government. Thus, this led to the introduction of the principles of equality.     

However, it is difficult to introduce the native revenue ordinance in the eastern regions because of no recognized natural leaders. There were various attempts of improving native revenue generation in a peaceful and careful manner, but it always resists to function.

          This led to Aba Women riot of 1929 and claimed about fifty lives and properties worth thousands of money.

          In  1976, local government system initiated by the federal military government was remarkable in a number of ways. In the first place, it was the first time local government was introduced in Nigeria. The 1979 constitution improved the situation with more recognition being accorded to local government in the country. This in essence means that in Nigeria, we have the Central Government, State government and the Local government can be a subordinate government. Systematically designed as close as possible to the people at the grass root levels with the objective of facilitating development.

          Emphasis on this development, each council is expected to mobilize all resources at its local and even beyond and the development of the area is ensured the spirit of the deformation was jurisdiction basically stated on the line below.

Local government have over the years suffered the continuous showing down of their powers. Lack of adequate funds to appropriate institution had continued to make Local Government ineffective and inefficient. Excessive politics had made even modest progress impossible. Consequently, there has been a problem between the people and the government has therefore realized the role which the Local Government plays to the nation. Then for the Local Government to achieve the objectives of 1976 Local Government reforms which the Federal government made, the Local Government authority has to be autonomous. This autonomy was given in 1989 to this present day. This gives room for the Local Government authority to exploit all available resources for the development and improvement of standard of living for their own jurisdiction. Before Local Government authority were under the umbrella of State Government.

          Nwankwo G.O. (1982) in his contribution stated that the government source of revenue can be divided into three sources

Namely: - Taxation, Borrowing and Miscellaneous.

          The Local government avenue of revenue generation are four types namely: - Tax, Rate and License, government allocation and miscellaneous. Then Longmans Dictionary defined revenue as the total annual income of the government. Government departments or agents are those delegated with the responsibility of generating revenue for the government through many sources.

            This work is limited to Local Government revenue in Nigeria. In the analysis references will be made to three years actual receipt by the local government authorities. Table will be used for clarification when it will come and it will cover from 1995 to 1997.


The study is limited to some local government area of Enugu State namely Nsukka Local Government, Isi–uzo Local Government and Udi Local Government Area.

As a result of limited resources like fund etc., we were restricted to certain number of area of study to the above mentioned.

Also owing to limited time as a result of academic time table, the resources were limited in both scope and wider research.

There are restrictions on the side of respondents with the fear of exposing their privacy. This also limits the study to the free response of respondent.


Revenue generation is not easy task in Local Governments of Nigeria. It entails interacting with the communities. There must then be available stop equipment for this purpose. According to the Local Government revenue officers, the local government are encountering much problems in their task of revenue generation. Some of these problems include:

Migration: - Inhabitants of the local government tend to move to urban areas in search of white-collar jobs this movement of their adults tends to affect their revenue. However, it was observed that migration is not only for white-collar jobs, but to enjoy social amenities in other areas which the local government are deprived of.

Transportation hinders the movement of revenue officials in the area. Lack of vehicles and bond network of roads also poses some problem. These of course, causes rapid wear and tear on the few vehicles available.

It is known that market stallages give substantial revenue to the local government authorities. Market stallages are also another problem. This reduces the amount realized from market stallages. This reduces the amount realized from market stallages. This reduces the amount realized from market stallages. This can be read from the table to be seen later in this work. It will show the total number of market stallage in a particular local government area of Nigeria as 7711 stalls. Out of this stalls almost one third of it did not pay revenue.

Communication link is totally lacking. There is no telephone system for quick response to problem.

Attitude of revenue official towards public fund is another major problem. This is becoming rampant some revenue collectors direct the money collected into their private purse. Some also collect with the members of the public to defraud the Local Government revenue.

Moreover, workers are not trained well in collecting of revenue. The programme of In-Service Training (I.S.T.) among the workers is not encouraged. So there are no skilled labourers. Even when anybody is against the law, the revenue collectors will not know.

Another problem is that the lives of the agents that the local government sends into the village are in danger. Some of them are attacked by the villagers and accused of robbery; even if the agent show them their identity card because there is no policeman to execute them.

The delay of High Court in the judgment of local government cases against any defaulter. It was made to believe that some of the tax defaulters are not only the illiterate group but also the social ruling class like doctors, engineers and industrialists. This people dodge the payment of tax.


With this study, state and federal government will be spending less on local government because the revenue collection officers in the local government will know how to make good use investment of their revenue. Their ignorance will be eliminated.

Also the revenue collected will be controlled in the sense that there should not be any fraud in local government.

Moreover, the staff of the local government will be trained on the issue of revenue generation.

Also the study will ensure that the various channels of generating revenue are utilized. Example: to make sure that all the open stalls pay their revenue.

There should be no undue, interference with the work of the revenue collection in the local government to the constitution.

The officers will moreover eliminate conflict complicating and difficult situation.


Revenue generation in local government is the total annual income, which are collected to cater for the well being of individual, organization and government and also for public funds. It is generally known that the main sources of government (local) revenue are taxes, receipts from republic enterprise, fines, fees and voluntary gift and grants, license fees, profit from public.      

Tax according to Dr. Raton is a compulsory contribution imposed by a public authority, irrespective of the exact amount of service rendered to the tax-payer in return.

Professor Seligmen E.A.R. in his own contribution said “ a tax is a compulsory contribution from persons to the government detray the expenses incurred in common interest of all, without special reference to benefit conferred”.

Tax is also a sum total of money that must be paid by citizens on a percentage of their income, property value fees or possession for the support of the government.

Tax can also be defined as a compulsory levy on properties and income of individuals and non-human being e.g. company.

Tax also defined a non-punitive but yet a compulsory levy on properties and income of individuals and corporate bodies.

Adam Smith (1976 in his book said that “ tax is a liability imposed upon the essence by a public authority, to pay a specified amount within a specified period “.

These three definitions point towards one direction, that is the characteristic of tax. Firstly, it is a compulsory contribution imposed by the government on the people within her jurisdiction.

Since this is a compulsory payment, any person that refused to pay a tax is liable to punishment.

Secondly, it is also compulsory payment imposed by the government agent on the people that is able to pay.

Third, a tax is a payment made by the tax - payer which is used by the government for the benefit of the citizens. The government uses the revenue collected from taxes for providing hospitals, schools and other amenities to the public.

Fourthly, a tax is not levied in return for any special service rendered to the tax - payers by the government. Thus, tax - payers cannot get any special benefit from the government in return for the tax paid by him.

However, Anderson O. (1979) said that “tax can be divided into two – direct and indirect tax. Direct tax is based on income of individual and wealth of the tax payers which are paid directly to the government as a result of the income being earned – both earned and unearned. Indirect tax is paid by the producers of goods and services.

The burden is finally not borne by the tax – payer, but the ultimate consumers.

The profit from public revenue generation also forms a part of the government revenue. The local government and government bodies operate commercial enterprises and public utilities. Such enterprises may be run on monopolistic or competitive bases.

Example includes National Electric Power Authority, Radio Nigeria, Water Works, Railways and Post Offices etc. The price charged in excess of normal cost of production is like tax.

Fee, fines and license are also sources of revenue to the government. A considerable amount is flown into the government pocket through these means.

LICENSES: However, license fee is different from a fee. A fee is paid for some services actually rendered while a license fee is chargeable by the public authority to grant a permission to a person to perform service controlled and regulated over the various activities.

FINES: These are penalties imposed to collected revenue and also to punish the people for the infringement of the state laws. They resemble taxes, only that they are compulsory payment without any claim or something equivalent to tax paid.

GIFT AND GRANT: Gifts are voluntary contribution by individuals and societies to the government. It is also given by the Federal Government to the State or Provincial Government to meet the cost of specific projects or schemes in public interest. Such as the provision of drinking water, drainage, irrigation road (etc)

Besides, there are unconditional grants, which can be utilized by the receiptant authority in any manner utilized for the purposes of development. Government sources of revenue is in exhaustive depending on the policies and location of the government authorities concerned.                              


Anderson David (1976)   Economic of West Africa, 2nd Edition; London; Macimillian Education; Page 277

Grewu E.O. And Ademumi J.B. (1983) Local Government in Nigeria; 3rd Edition; Benin; Ethiopia Publishing Co-operative; Page121 & 147

Nwankwo G. O. (1982)  Basic Economic 3rd Edition; Lon don; Cambridge University Press, Page 170