The research work was targeted at examining “Revenue collection and administration in Lagos State.” The population of the study is Badagry Local Government Area of Lagos state. The first chapter deals with the background of the study with evidence to the statement of problems as identified by the researcher, while the second chapter deals with logical and critical review of relevant related literatures as it relates to revenue generation and revenue utilization (internally), chapter three focuses on the methodology adopted by the researcher to evaluate the stated research topic with a sample size of one hundred (100) staff which was randomly selected in the study area. Three hypotheses were formulated and tested at 0.05 level of significant through the use of chi-square. Chapter four deals with interpretation and analysis of data gathered from respondents which the last chapter deals with summary, conclusion and recommendations which states that The local government chairman should ensure that machinery be in place to generate more revenue internally too enable them do more development projects, The local government authorities should not be over dependent on statutory allocation from the federal government, Training and re-training programmes for the revenue officials should  be organized  to enable  them meets the challenges of the new millennium, Enlightenment campaigns on the revenue to be paid by individual should be carried out.




Title Page                                                                                 i

Certification                                                                             ii

Dedication                                                                                iii

Acknowledgement                                                                             iv-vi

Abstract                                                                                   vii

Table of Contents                                                                     viii-x


Background of the study 1-3

Statement of the problem 4

Objectives of the study 4-5

Research questions 5

Research hypothesis 5

Significant of the study 5-6

Scope of study 6

Limitation Of The Study 6

Definition Of Terms 6-7



2.0 Introduction                                                                       8

2.1 Concept of Revenue                                                           8-10

2.2. Theoretical Framework                                                     10-12

2.3. Local Government Revenue Sources                                 13

2.3.1. Statutory Allocation                                                       13

2.3.2  Government Grant                                                                   14

2.3.3  Internal Generated Revenue                                            15

2.4     Tenement Rates                                                              16-17

2.5 Effective Financial Management of Resources                    17-19



Introduction 20

Research Design                                                            20

Population Of The Study                                                        20

Sample Size And Techniques                                        20

Research Instrument                                                                20

Administration of the Questionnaire                              21

Method Of Data Analysis                                                        21



Introduction 22

Analysis Of Respondents Bio Data                                22- 25

Testing For Hypotheses                                                 25-31



Introduction 32

Summary                                                                       32-33

Conclusion                                                                    33-34

Recommendations                                                                   34-35

References                                                                           36-37

Appendix I                                                                         38-39

Appendix II                                                                       40-45





Chapter One

  • Background of the Study

Revenue collection in Nigeria local government is principally derived from tax. Tax is a compulsory levy imposes by government on individuals and company for the various legitimate function of the state (olaoye, 2008).

Tax is a necessary ingredient for civilization. The history of man has known that man has to pay tax in one form or other that is either in cash or in kind, initially to his chieftain and later on a form of organized government (Ojo, 2003). No system or rules can be effective whether foreign or nature unless it enjoys some measures of financial independence. Local government in Nigeria has developed over a number of years. Historically, the development of direct taxation in local government in Nigeria can be traced the British pre-colonial period under this period, community taxes were levied on communities (Rabiu, 2004) recently the revenue that  accrues to local government is derived from two broad sources, Viz the external source and the internal sources and effective local government system rest majorly on the availability of human and material resources which the nation could mobilized and harness for local government development.

In 1976, the military governments then issued guidelines on local governments reforms. The reforms which gave recognition to local government as the third tier of government whereby government activities at the local level were taken care of.

In 1988, another reform of local government was established. This gave a substantial and unprecedented reform of autonomy to the local government in the country.  With this autonomy, greater responsibilities devolved on the local government therefore became a common knowledge that most of the local government are finding it difficult to cope with the present level of responsibilities. The principal aims of creating local governments were as follows:

  1. To serve as the third tier of government through which appropriate services and development are made in response to the wishes of local community through their representatives.
  2. To serve as an intermediary between government at the center and local communities.
  3. To mobilize and utilize both human and materials in resources by engaging the people at the local level in the government activities.
  4. To facilitate the exercise of democratic self-government closer to the grass root of the society and to exchange initiative and leadership potentials.

Function of a Local Government Council

The function of a local government council shall include participation of such council in the government of a state in respect to the following matters.

  1. The provision and maintenance of primary adult and vocational education.
  2. The development of agriculture and natural resources, other than the exploitation of minerals.
  3. The provision and maintenance of health services.
  4. Such other functions as may be conferred on a local government council by the House of Assembly of the State.

Structure of the Local Government

The Badagry Local government like any other local council is structured into eight apartments which are as follows:

  • Personnel management department.
  • Planning, research and statistics department.
  • Primary Health and Social Welfare department.
  • Finance and Supplies department.
  • Works, Housing, Lands and Survey department.
  • Agriculture and Natural resources department.
  • Education department.
  • Audit department.

1.1     Statement of the Study

The local government is faced with myriads of problems ranging from corruption and embezzlement, poor financing, mismanagement of funds to poor leadership. This has deterred the development of local government in Nigeria.

The major issues are; what has contributed to the non-performance is it because of total dependence on federal and state statutory allocation? Is it as a result of poor internally generated revenue drive? Is it because of ineffective utilization of available scarce resources or mismanagement by public office holder? Among others, certain percentage of the statutory allocation has always been deducted by the state government thereby causing the local government to underperform.

1.2     Objectives of the Study

The broad objectives this research is it evaluate the relationship between the total revenue collection by the local government. The specific objectives are;

  1. To examine the relationship between statutory allocation to local government and project execution
  2. To ascertain the extent which value added tax has contributed to government revenue in Badagry local government.
  3. To evaluate the extent to which internally generated revenue has contributed to local government service delivery.

1.3     Research Questions

  1. What significant impact does statutory allocation to local government has on service delivery in Badagry Local Government?
  2. Does value added tax contribute significantly in revenue base of Badagry Local Government?
  3. To what extent has internally generated revenue of Badagry Local Government impacted on its service delivery?

1.4     Research Hypothesis

  1. Statutory allocation to Badagry Local Government has not made any significant impact on service delivery of Badagry Local Government.
  2. Value added tax has not impacted significantly on revenue base of Badagry Local Government.
  3. Internally generated revenue of Badagry local government has not contributed significantly to its service delivery.

1.5     Significance of the Study

From the outlook, there is need for the local government to improve their performances. However, the research is significantly considering the closeness of the local government to the grass roots people and the need to utilize substantial revenue for it various sources in addition to federal and state statutory allocation for developmental purpose.

1.6     Scope of the Study

The study would appraise the Revenue collection and Administration in Badagry Local Government Area of Lagos State.

1.7     Limitation of the Study

This study is limited to Badagry Local Government Area of Lagos State.

1.8     Definition of Terms

Local Government: According to Lawal (2000) defined local government as a political sub-division of a nation in Federal system which is constituted by law and has substantial control of local affairs which includes the power to impose taxes or exact labour for described purpose.

Revenue: Is the total fund generated by government(Federal, State and Local government) to meet their expenditure for a fiscal year. Revenue could be internal or external revenue.

Generation/Collection: This is the process of sourcing revenue for the local government in carrying out their aims and objectives.

Tax: Is defined as a compulsory level impose on government, individual or its agency on goods and services, income and wealth. It provides definite source of revenue for government expenditure

Tax Evasion: It means illegal reduction in one’s tax liabilities, thereby paying less than the appropriate amounts and not paying at all.

 Administration: The act of administering government of public affairs, the service rendered, or duties assumed, in conducting affairs; the conducting of any office or employment; direction.