THE IMPACTS OF POOR REVENUE GENERATION ON THE DEVELOPMENT OF LOCAL GOVERNMENT AREAS.
ABSTRACT
Revenue generation is the nucleus and the path to modern development. Thus, the study was to assess the impact of poor revenue generation on the development of Local Government Areas. This is because local government as the third tier of government and the closest to the people especially in the rural areas needed revenue to provide basic social amenities to the people. But it is unfortunate to note that the local government management have not lived up to expectation especially to provide basic social amenities to the rural people. Thus, the objective of the research was to analyze the extent to which poor revenue generation had affected the development of those areas. The researcher used primary and secondary methods of data collection to generate the needed data. The data obtained through questionnaire was presented in tables and expressed in simple percentages. The following were some of the findings which included poor development of the areas, lack of basic social amenities to the rural people and lack of revenue to maintain the existing infrastructures. The researcher therefore recommended that the local government should provide basic amenities of high quality. By doing so, the people’s interest would be geared towards giving their maximum support to the local government which would lead to the development of the rural area.
CHAPTER ONE
1.1 BACKGROUND TO THE STUDY
Development is a sine qua non for modern civilization. In a crusade and struggle to carryout development at all nooks and crannies of the society, the local government as the tier of government that is nearest to the people is saddled with the responsibility of direct development of the people to a certain level. Development is highly associated with fund, much revenue is needed to plan, execute and maintain infrastructures and facilities at the local government level. The needed revenue generated for such developmental projects. Like construction of accessible roads, building of public schools, health care centers, construction of bridges among others are soles generated from taxes, royalties, haulages, fines and grants from states, national and international governments.
Thus, the Local government cannot embark, execute and possibly carryout the maintenance of these projects and other responsibilities without adequate revenue generation. This is the basic reason why development is skeletal at some Local Government councils in Nigeria. The issue of poor revenue generation is not exceptional to local government in Abia State. This has been one of the problems encountered by IdeatoLocal Government. This however pronouncedly affected development negatively in local government councils. In this research project, the issue to address is how far can this poor revenue generation affect development especially in IdeatoLocal Government.
1.2 STATEMENT OF THE PROBLEM
The Local Government Council take direct care of the grassroots people, that is the people in the rural areas. This group of people sometimes lack essential facilities and condition of modern civilization. They lack pipe bore water to drink, do not have electricity, accessible roads, poor educational infrastructure and facilities to mention but a few. This is one of the major reasons of rural – urban migration of movement. This has made our cities to be congested and increase in many criminal activities. Based on the above and foregoing assertions, it is obivious that the impact of poor revenue generation on the development of the rural area is a serious problem. This might be as a result of poor revenue generation. If Nigeria is to achieve her desired goal of vision 2020 and possibly meet the millennium development goals (MDGS) target, the issue of revenue generation must be addressed squarely. Hence the researcher is bothered to find out the impact of poor revenue generation on the lives of people at the rural area and how it has affected development in general especially in IdeatoLocal Government Area.
1.3 PURPOSE/OBJECTIVE OF THE STUDY
The broad objective of the research is to evaluate the impact created by poor revenue generation on the development of Ideatoin Abia State.
The other objective of this study includes:
i. To determine the level of modern social amenities available in Ideato North.
ii. To find out the level of poverty associated with the rural people as a result of poor development
iii. To find out the degree of rural-urban migration.
iv. To make useful suggestions to solve the problem of poor revenue generation as development depends on revenue generated.
1.4 RESEARCH QUESTIONS
i. What are the impacts of poor revenue generation on the development of Ideato North?
ii. Are there adequate modern social amenities in Ideato North?
iii. Is the poverty level of the rural people high has a result of poor development?
iv. Has poor revenue generation in Ideatocontributed to rural-urban migration?
v. How can revenue generation in Ideatobe improved?
1.5 SIGNIFICANCE OF THE STUDY
The significance of any human endeavour is measured by its relevance to solving human problems. The findings of this study would help IdeatoLocal Government to identify the problems associated with revenue generation and its consequences on development.
1.6 SCOPE AND DELIMITATION
The study is focused on the impact of poor revenue generation and how it affects development of the local government areas. It will also involve the analysis of problems associated wit revenue generation and its impact on the development of IdeatoLocal Government.
1.8 DEFINITION OF TERMS
Some concepts require proper explanation to enhance our understanding of the theme where necessary opinion of scholars will be cited to explain the terms. The researcher will also give some fundamental definition of terms.
LOCAL GOVERNMENT
According to Lawal (2000) Local Government as a political sub-division of a nation in Federal system which is constituted by law and has substantial control of local affairs which includes the power to impose taxes or exact labor for prescribed purpose. According to William Robson (2006) Defined Local Government as involving the conception of territorial, non-sovereign community possessing the legal right and the necessary organization to regulate its own affairs.
REVENUE
Public revenue could be defined as the funds generated by the government to finance its activities. In other words revenue is the total fund generated by government (Federal, state, local government/ to meet their expenditure for a fiscal year. This refers also to the grand total of money of income received from the source of which expenses are incurred. Revenue could be internal or external revenue.
GENERATION
This is the process of sourcing revenue for the local government in carryout their aim and objectives.
EXPENDITURE
Public expenditure refers to the expenses which the government incurs for its own maintenance, in the interest of the society and the economy in order to help other countries.
Tax
Tax can be defined as a compulsory levy by government on goods, services, income and wealth. It provides definite source of revenue for government expenditure. (Udeh O.S. 2008)
It is the way by which government obtain extra money. It spent from income of individual and companies. Tax could be direct or indirect tax. A tax is a payment made by the taxpayers and used by the government for the benefits of all the citizens.
TAX EVASION
Tax evasion means illegal reduction in one’s tax liabilities, thereby paying less than the appropriate amounts and not paying at all.
TAX AVOIDANCE
Tax avoidance is the act of streamlining one’s financial affairs within the law so as to minimize the tax liabilities.
DEVELOPMENT
According to Ake (2001) Development is thus the process by which people create and recreate themselves and their life circumstances to realize higher levels of civilization in accordance with their own choice and values. It also a type of social change in which new ideas are introduces into a social in order to produce higher per-capital income and levels of living through more modern production methods and improved social organization.
