Local Government Taxes for Micro Small and Medium Scale Enterprises

By Deloitte Nigeria | 2 min read
13th July 2017
Local Government Taxes for Micro Small and Medium Scale Enterprises

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:


S/N

Tax or mandatory contribution

1

Shop and Kiosk rates

2

Tenement rates

3

Slaughter slab fees

4

Marriage, birth and death registration fees

5

Right of occupancy fees on lands in rural areas, excl. those collectible by FIRS&SIRS

6

Naming of street registration fees, excl. any street in the state capital

7

Motor park levies

8

Domestic animal license fees

9

Bicycle, truck, canoe, wheel barrow and cart fees

10

Cattle tax payable by cattle farmers only

11

Merriment and road closure levy

12

Radio and television license fees (other than radio and television transmitter)

13

Vehicle radio license fees

14

Wrong parking charges

15

Public convenience, sewage and refuse disposal fees

16

Customary burial ground permit fees

17

Religious places establishment permit fees

18

Signboard and advertisement permit fees

19

Wharf charge

20

On and off liquor license fees

21

Market taxes and levies excluding market where state finance is involved


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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This publication contains general information only, and none of Deloitte Touche Tohmatsu Limited, its member firms, or their related entities (collectively, the “Deloitte Network”) is, by means of this publication, rendering professional advice or services. Before making any decision or taking any action that may affect your finances or your business, you should consult a qualified professional adviser. No entity in the Deloitte Network shall be responsible for any loss whatsoever sustained by any person who relies on this publication.

© 2017 Akintola Williams Deloitte





Deloitte Nigeria
Deloitte & Touche is the Deloitte Touche Tohmatsu Limited (DTTL) member firm in Nigeria and the oldest indigenous professional services firm in Nigeria. The firm was established in 1952 by Mr. Akintola Williams, FCA, CFR, CBE, the doyen of the accountancy profession in Nigeria. Through astute management, the member firm has grown in size and scope of services to become one of the largest global professional services organisations in Nigeria, with offices in Lagos, Abuja and Port Harcourt. The firm currently provides audit, tax, consulting, accounting and financial advisory, corporate finance, and risk advisory services, to public and private clients spanning multiple industries. www.deloitte.com.ng
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