Posted by / Wednesday 12 October 2016 / No comments

The sources of revenue for Local Government

A Local Government is a local political unit of the state which is established by law with the powers to administer the local areas on behalf of the central government.

 Government Grants
Some capital injection is received from the central government by the Local Authorities. These monies come in the form of grants. These grants are used in the development efforts of the Local Authority.

Commercial activities
Some local governments undertake commercial activities to bring in the needed revenue for local use. They, for example, operate transport services which bring in income.

Fees and Charges
As part of their functions, Local Authorities provide certain facilities for use by the local people. They provide toilets, markets, parking spaces and those who patronize these facilities are charged some fees for using them. The fees and tolls so collected, serve as a source of income for the Local Authority.

For some types of business operations to be legitimate in a Local Authority, the authority must have issued a license. The operation of businesses like drinking spots and entertainment spots, for example, require licenses. There are charges for every category of license issued and these form another source of revenue for the Local Authority.

Commercial Borrowing
The Local Authorities could borrow on their books, directly from the market. In other words as an entity, Local Authorities borrow from the commercial banks to undertake some important projects for the Authority or for investment in other ventures.

Property Rates
There are taxes that are slapped on properties by Local governments. These are annual rates that are paid on immovable properties. This another source of income for Local Authorities.

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