Today, Local Governments in Nigeria are faced with many challenges militating against accurate and efficient tax collections. Some of these challenges are:
Tax Evasion – deliberate and wilful practice of not disclosing full taxable income so as to pay less,

Tax Avoidance – this is legal arrangement of using tax regime to minimize tax liability, Poor assessment of tax value and penalties.

Cumbersome Process of Payment – the procedural process of paying; Levy, Rate, License fee etc in every local government are too cumbersome and this do not encourage prompt payment.

Inadequate penalties for tax defaulters.

High cost of tax collection

Furthermore, a robust database technology shall be required to make Local Governments be more pro-active in taking actions that reduce fraud and non-compliance from tax collectors and tax payers respectively.