Nigeria is a Federation with Governmental authority distributed along Federal, State and Local Government levels. This distribution also applies to the taxing rights in Nigeria. Based on the exclusive legislative list in the Second Schedule of the 1999 Constitution of the Federal Republic of Nigeria, the Federal Government has exclusive legislative power to impose all taxes in Nigeria.  However, item 7 of part 2 (concurrent legislative list) of the schedule also permits that State governments have powers to impose taxes or duties on capital gains, incomes or profits or persons other than companies.

The Local Government Authorities derive their powers and rights of collection of taxes from item 9 of part 2 of the second schedule which prescribes that State Houses of Assembly may make provisions for the collection of any tax, fee or rate or for the administration of the Law providing for such collection by a Local Government council.

The taxes and Levies (Approved List for Collection) Act (the Act) specifies the taxes and levies collectible by each of the three tiers of government.

In this article, we will be focusing on taxes collected and administered by local governments.

Taxes collectible by Local Government

Based on the 2015 amendment of the Act, there are twenty-one (21) taxes collectible by the Local Government are as follows:

Amount of taxes and levies payable

There are no uniform rates and due dates for local government taxes/levies in Nigeria.  This is largely dependent on what is set by each Local Government Authority (LGA). However, some states such as Lagos State have enacted laws to unify the administration of local taxes by LGAs within the state, stipulating the amount that should be collected for each tax type depending on the location of the community (i.e. urban, semi-urban or rural areas).

Local Governments are expected to issue demand notices to taxpayers and appoint accredited agents of collection.

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