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Difficulty: MediumLocal Government: System, Functions, Finance, and Reforms

Local governments in Nigeria rely on both external transfers and internal revenue streams to finance local administrative operations and municipal services. Which of the following is classified as an Internally Generated Revenue (IGR) source exclusive to local government councils?

  1. Tenement rates levied on private properties and market stall feesAnswer
  2. B
    Statutory allocations disbursed from the Joint State-Local Government Account
  3. C
    Personal income tax collected from members of the armed forces and diplomatic corps
  4. D
    Customs duties and excise tariffs collected on imported consumer goods

Answer

Tenement rates levied on private properties and market stall fees represent an Internally Generated Revenue (IGR) source collected directly by local government councils.
Tenement rates levied on residential/commercial property and levies collected from market stalls are direct sources of internally generated revenue (IGR) that local government councils collect independently to finance community infrastructure and local public services.

Step-by-Step Solution

1
Distinguish between external revenue transfers and internally generated revenue (IGR) for local government councils in Nigeria.
External transfers include federal/state statutory allocations, while IGR consists of fees, rates, and licenses levied directly within the local jurisdiction.
Understanding revenue classification is essential for analyzing local fiscal autonomy.
2
Evaluate the listed revenue sources against local council constitutional functions.
Tenement rates, market charges, motor park fees, and liquor license fees are revenue items collected directly by local councils, making tenement rates and market fees the correct IGR classification.
Tenement rates and market stall fees are direct local levies designated under local council financial provisions.

Key Concept

Local Government Internally Generated Revenue (IGR) vs External Allocations
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Topics

Local Government: System, Functions, Finance, and Reforms

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