SOURCES AND PATTERN OF EDO STATE GOVERNMENT REVENUE 1999-2010

CHAPTER ONE

1.0 INTRODUCTION

1.1 BACKGROUND OF THE STUDY

There is no country or state that can adequately attend issue of development without having in place adequate and sustainable revenue sources for the activities of government. It is becoming extremely difficult for the government to execute developmental agenda without measures in place to guarantee revenue to finance the project and programs. Oshiomole, (2011) stressed further that the issues of adequate revenue is essential for the sustainability of the state especially in the face of the recent global economic meltdown. The government all over the world depend on contributions of citizens inform of levies and taxes to administer and run the state or sovereignty. The increasing cost of running government coupled with dwindling revenue had le various state governments in Nigeria with no option but to formulate strategies to improve the revenue base. The serious decline in the price of oil in recent years has led to a decrease in the funds available for distribution to the states in Nigeria.

The need for state government to generate adequate revenue from the internal sources has therefore become a matter of extreme urgency and importance. The revenue base of the state government must be geared toward making the state government virile, self sustaining and to a large extent less dependent, financially on the statutory allocation from the federation account. However the experience of the last few years in Edo state, indicates that financial independent of the state government has been rather elusive because of political embroiled economic instability and worsening social condition. It is against this background that the subject of revenue generation in Edo State has gained prominence. It has also been observed that a dominant features of the revenue profile of Edo state before the advent of the current administration was dependent on statutory allocation from the federation account. The current administration in Edo state argued that the shock from the international market had drastically reduced the accruing revenue from the federation account so much so that it was near suffocation at the inception of this administration (Edo light, October-November 2010). It was therefore imperative that other sources other than FAAC must emerge if the state will not go under. Measures introduced were the total overhaul of the I G R collections machineries of the state government to increase its revenue base, sensitization and public enlightenment, review of existing tax law, penalties/sanctions for evasion and avoidance.

1.2 STATEMENT OF THE PROBLEM

For any state government to excel in its primary function of providing essential services to the people of her state, there is no doubt that she needs a sustainable revenue generation. However, the performance of many state governments in Nigeria income generation is far below expectation since the advent of democracy. Observation across Edo state since 1999 shows that the state government has not really lived up to expectation in providing social and essential services to the people. Linked to this is the internal revenue generation of the state government which is not properly coordinated. It is for this reason that this research is being proposed or designed to address the following research questions. · What are the sources of revenue of Edo state government since 1999 till date? · Is the revenue generation poor? · Why is the revenue generation in Edo state poor since 1999? · How can the revenue generation be improved?