THE PROBLEMS OF TAX COLLECTION AND EFFECTS ON THE REVENUE GENERATION IN NIGERIA

Code No: 440571

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ABSTRACT

The essence of this research work is to critically evaluate the problems of tax collection and their effects on the revenue generation. A study of Orumba South Local Government Council. In spite of the recent drawn in successful government administration in the state make general revenue through taxation, fine, levies etc. One amongst has been a continuous sub optimal realization of the project figure as the study revealed. This is due to the tax collection procedure, inappropriateness of the rates used, incomprehensive of the tax system and non-adequacy of the control system in various tax offices in the local government council. Data for the study were collected from two main sources; primary and secondary data. A descriptive designed was adopted for the study. A total of80 respondent from different department. The instrument employed in obtaining the data used for the study was questionnaire. The three hypotheses were test using chi-square at 0.05 levels significant. The three hypotheses were all rejected in favor of alternative hypotheses. The summary of the finding revealed that there has been a sub-optimal realization of revenue from the inexperienced sources. Based on the findings of this study, the local government is recommended to finance and conduct more research work on revenue generation procedures and methods.

CHAPTER 1

CHAPTER ONE
1.0INTRODUCTION
1.1BACKGROUND OF THE STUDY
The importance of revenue generated to the Local, States and the Federal Government cannot be overemphasized. Its importance to the Federal and State Government in recent time promulgated and introduced policy reforms in the country through taxation laws and policies which is our major source of revenue generation. This can be seen not only in the introduction of new tax, the Value Added Tax (VAT), but also in the improvement of the administration of non-oil taxation with the main objective of substantially improving the generation of revenue and sources as well as to reduce to the barest the nationâ€™s (the local, the state and federal government minimum inclusive) dependency on the oil sector and sources of revenue generation.
According to Ola (1984), income tax is one of the major sources of Revenue to Government in Nigeria and it is a factor to be reckoned within both the local, state and the federal government budget, the primary purpose of taxation is to raise revenue to finance government capital and recurrent expenditure. Furthermore, Ayua (1999) noted that â€œThere is hardly any government today that does not relay on taxation as a measure not only to provide for the much needed revenue for socio-economic growth and development but also to reduce the inequalities of wealth in the society. Taxation be it capital gains, tax or petroleum profile tax, personnel income tax, levies, fines etc as a source of generated revenue in the hands of government is used to achieve economic growth, fight depression and inflation in the economy, achieve equitable distribution of income and wealth, allocate resources in a socially and desirable manner so as to ensure that the balance of payment of the country, (the federal, states and local government) are in a healthy position. In Orumba local government there was an increased enlightenment on the need for citizens to pay their taxes promptly as a means of revenue generation in state, the state government during the last military regime took steps further to institute a task force to accelerate revenue generation in the state, all in a heel to raising revenue to budget standard which has always been falling below measure or budgeted.