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REVENUE GENERATION AND UTILIZATION AND ITS IMPACT ON LOCAL GOVERNMENT DEVELOPMENT IN NIGERIA

CHAPTER ONE

INTRODUCTION

1.1    BACKGROUND TO THE STUDY

Nigeria has three tiers of government systems, these are; (1) the federal government (2) the state government (3) the local government. These essences of this division of government into the federal, state and local level is to enable the government exercise her administration easily and effectively. However the 1979 constitution spells out the function of each level of government. Generally it can be said that the government are responsible for the provision of the collective (social) goods and services on a non-commercial basis as well as the provision of other social and economic service. In order to meet up with the forecasted goals and services, the government needs to collect revenues. Local government, which this work emphasizes on, can be described as the government at the local level, exercise through representative council, established by law to exercise specific power within definite areas. The government of such body is selected or otherwise locally selected.

The administering of government at the local level in Nigeria traced as far back as colonial period, when native authorities were established in their indemnity form, which is in their own ideas. They represented a system of indirect rule, which sought to establish a form administration through traditional authorities. Between 1950 and 1955, the first elected local government council based on the model was shade bushes in logos and in the former eastern and western region. Through, the traditional members constituted a maximum of 25 percent in most of the councils; the emergence of members elected on a political basis integrated the traditional rulers to gradually withdraw from active participation in local administration in Nigeria.

Presently, local government administration is still in existence assigned with numerous. Responsibility like bawling of market square, provision of pipe-borne water, motor parks, rehabilitation of local and rural roads, sanitary and health inspection, maternity home and dispensaries etc. Finally, local governments have two (2) main sources of revenue of fund. They are: External sources of fund  Internal sources of fund. The external sources of fund include: Statutory allocations from the federal and state government (i.e. 20% considered federal revenue and 10% of internally generated state revenue). Internally through receipt on rent and rates on their properties, tenement tax, earning from commercial undertaking, interest payment and dividend, licenses, fees and levies etc.

1.2     Statements of the Problem

Revenue collection is the collection of fund accrued from the taxes paid by the indigene of a country funds gotten from the import and export duties and bills paid by consumers of government goods and services. The method of the collection of this revenue was assessed and analyzed to know if we are really moving forward or backward. There is abundance of human resources in many local governments in Nigeria but the problem is the inefficiency of the local government to utilize these resources to its benefits. Thus, there is problem of accountability and mis-management of the abundance of human and material resources of the local government. Consequently, this research study set out to examine the effect of revenue generation in local government with Uyo local government as the study focus.

1.3     Objectives of the Study

(1) To determine how government establishment raise revenue from its citizenry

(i) To find out whether the method of enforcing accountability is very effective.

(ii) To find out if the system of revenue collection has effectively checked fraud arising from manipulation on accounting records.

(iii) To find out the challenge to revenue generation in local government.

(iv) To proffer solution to these problems.

1.4   Research Questions

(i) What is the ways government establishment raise revenue from its citizenry?

(ii)  Are there effective methods of enforcing accountability?

(iii) Are there effective system of revenue collection and checking of fraud arising from manipulation on accruing records?

(iv) Are there challenges to revenue generation in local government?

(v) what are the solutions to the problems revenue generation in the local government?

1.5   Research Hypothesis

The following research hypotheses are formulated to guide the research work.

Ho: There is no significant relationship between statutory allocation to the local government and development effort.

Hi: There is significant relationship between statutory allocation to the local government and development effort.

Ho: There is no effective method of enforcing accountability in the Local Government?

Hi: There is effective method of enforcing accountability in the Local Government?

Ho: There is no challenge to revenue generation in local government?

Hi: There is challenge to revenue generation in local government?

Ho: There is no solution to the problems revenue generation in the local government?

Ho: There is a solution to the problems revenue generation in the local government?

1.6    Significance of the Study

This study will be valuable to the Local Government Council and any other government establishment to appreciate the necessary inherent of the revenue collection and in our Local Government. To the researchers, will serve as a reference material for further investigation on the study/topic. The government following the recommendations will modify same to achieve better result. This will in turn sure the government huge financial losses.

1.7   Scope and Limitation

Since Nigeria has 774 local governments Area, it will be difficult if not impossible for the researcher to cover all the local government Area. Hence the scope of the study is limited to Uyo Local Government Area. It may not anchor well if the researcher fails to record some of the limitation encountered during the study within the aforementioned scope. These include: Time, finance, un-co-operative attitude by the respondents to some relevant question, among other limitations.

The very time left for the researcher to carry on this very work was very limited, which could not give chance for everything needed. The finance disposed was to small and restricted the researcher in visiting many places. The un co-operative attitude of some of the respondent hindered greatly the effective gathering of relevant data. Some feel much reluctant to answer some question posed to them, while others doubted the sincerity of the researcher and the usefulness of the study.

1.8    Definition of Terms

Taxation: this is one of the ways local government generate revenue. It is a compulsory levy imposed by the local government on most of the entire members of the society who are capable of paying tax or who are expected to pay tax.

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