The Impact Of Revenue Generation As A Tool For Economic Development (A Case Study Of Board Of Internal Revenue Abia State)

Project and Seminar material for Public Administration

Project and Seminar material for Public Administration


Abstract


This project is aimed at investigating the impact of revenue generation as a tool for economic development. In order to carry out this study effectively, the following questions were asked.

  1. Is revenue the nerve centre of efficient and effective management of any administrative undertaking be it in a private business, business corporation, public administration or personal business?
  2. What are the constraints associated or hampering revenue generation?
  3. What are the major sources of revenue accruable to Abia State?
  4. What are the mode of accounting for the tax and onward transfer of the revenue to the state government?

The researcher used the internal revenue service in Abia State for the study. From the study, the following findings were made:

  1. Revenue is needed to carry out jobs and in pursuance of the stated objectives. This is the reason the government of any country in the world lays an emphasis on the generation of enough revenue both internally and externally.
  2. There are many sources of government revenue. Each of them contributes to the total revenue accruable to the government. They include; sales of agricultural products, personal income tax, investment income, tax on rent.
    Product inspection, sales of poultry and textile product e.t.c.

In the light of this, the researcher recommends that Abia State government should equip the Board of internal revenue service in order to enable it put more adequate effort in revenue collection to encourage economic development in the state.


Table Of Contents


Preliminary Page(s)

  • Title page
  • Approval page
  • Dedication
  • Acknowledgement
  • Abstract
  • Table contents

Chapter One

1.0 Introduction

  • 1.1 Background of the study
  • 1.2 Statement of the problem
  • 1.3 Objectives of the study
  • 1.4 Research questions
  • 1.5 Significant of the study
  • 1.6 Scope of the study
  • 1.7 Limitation of the study
  • 1.8 Definition of terms

Chapter Two

2.0 Literature Review

  • 2.1 Introduction
  • 2.2 Historical background
  • 2.3 General overview of Abia State government revenue base in Nigeria.
  • 2.4 Sources of state government revenues
  • 2.5 Problems/challenges of revenue generation In the state government especially in Abia State Government
  • 2.6 Viable investment for enhancing state Government revenue base References
  • References

Chapter Three

3.0 Research Design and Methodology

  • 3.1 Introduction
  • 3.2 Research design
  • 3.3 Sources/methods of data collection
  • 3.4 Population and sample size
  • 3.5 Sample technique
  • 3.6 Validity and reliability of measuring instrument
  • 3.7 Method of data analysis

Chapter Four

4.0 Presentation and Analysis of Data

  • 4.1 Introduction
  • 4.2 Presentation of data
  • 4.3 Analysis of data
  • 4.4 Interpretation of result(s)

Chapter Five

5.0 Summary, Conclusion and Recommendations

  • 5.1 Introduction
  • 5.2 Summary of findings
  • 5.3 Conclusion
  • 5.4 Recommendations
  • References
  • Appendix
  • Questionnaire

Chapter One


1.0 Introduction

Revenue is defined by pubic administration law as all tolls, taxes impress, rates fees duties fines, penalties forfeiture, rents dues and all other receipts of government, from whatever source arising over which the legislature has power of appropriation including proceeds from loans raised.

According to oxford Dictionary, revenue is the money that a government receives form taxes or that an organization receives from its business.

An effective local government system rest majorly on the available human and material resources which the nation could mobilize and harness for local government. In 1976, the federal military government then issued guidelines on local government reforms. The reforms which gave recognition to local government as the third tier of government thereby government activities at the local government level were taken care of.

In 1988, another reform of local government was established. This gave a substantial and unprecedented reform or autonomy to local government in the country with this autonomy, greater responsibilities devolved on the local government therefore, became a common knowledge that most of the local government are finding it difficult to cope with the present level of responsibilities.

The principal aims of creating local government are as follows:

  1. To server as the third tier of government through which appropriate services and development are made in response
  2. to the wishes of local community through their representatives.
  3. To serve as an intermediary between government at the centre and local communities.
  4. To mobilize and utilize both human and material resources by engaging the people at the local level in the government activities.
  5. To facilitate the exercise of democratic self-government closer to the grassroots of the society and to exchange imitative and leadership potential.

Mostly, all local governments in Nigeria do no huger perform their responsibilities simply because of poor finances arising from inadequate revenue generation drive.

This also affects the process of budgeting.

The bad financial situation is aggregated further by the prevailing inflationary situation in this country which erodes the value of finds available to render essential social services to the people.

Although the precarious situation of the local government has been blamed on the total dependence on federal and state government for monthly statutory allocation instead of looking onward to improve their internally generated revenue (IGR) drive in order to bring about economically feasible budgeting and desired development.

Revenue is said to be the new centre of efficient and effective management of any administrative undertaking be it private business corporation, or public corporation. Revenue is needed to carry out jobs and in pursuance of the stated objectives. This is one of the reasons why the government of any country in the world lays emphasis on the generation of enough revenue both internally and externally.

Revenue generation on the part of the government has been in existence since the reception of governance. To this end, so may revenue generating structures rules, laws and bye-laws have been used by the administrative class to raise founds for the up keep of the society.


1.1 Background Of The Study

Revenue is said to be nerve centre of efficient and effective management of any administrative undertaking be it in a private business corporation, public administrative or personal business. A government or a functioning organization needs some revenue. Revenue is needed to carry out jobs and in pursuance of the stated objectives.

This is the reason the government of any country in the world lays an emphasis on the generation of enough revenue both internally and externally revenue generation on the part of government has been in existence since the caption of government. To this end so many revenue generating structures rules laws and bye-laws have been used by the administrative class to raise funds for the up keep of the society.

The Abia state needs funds for its service activities.

To facilitate this it creates effective machinery for revenue mobilization. The Abia state board of internal revenue (BIR) now known as industrial revenue services is under the ministry of finance and economic planning.

The government body or agency that is the federal inland revenue for the federal government and board of internal revenue for the state government. This activities and management of all the revenue generating bodies in the country is coordinated by the body know as the joint tax board (JTB). This body is made up of all the heads or chief executives of all the state board of internal revenue. Section 27 of the income tax management act, 1961 provides it the legal backing.

The Abia state board of internal revenue was established under the provision of the Ses Edict 1969 with a director of internal revenue as the chief executive. The aim of the board is to administer the appropriate tax laws, the assessment, collection and accounting for the taxes collected. The board operates and collects various kinds of taxes which includes among others pay as you earn (PAYE) with holding tax, pool tax, entertainment tax, sales tax, etc. How these tax units operates and generate the said revenue will be examined critically in this work.


1.2 Statement Of The Problem

There has been many studies discussion and research into the field and issues of revenue generation as a tool for economic development both internally and externally. Though their study have not prove its effects and sometimes inadequate in contents.

In spite of this situation the problem of management labour relation have not been properly dealt with. Most of the studies on revenue generation are mostly prescriptive on the issue of salary and wages administration, material resources and overtime benefits etc.

This study therefore intends to explore the impact of revenue generation as a tool for economic development to full revenue generation thereby encouraging economic development in the state and Nigeria as a whole.


1.3 Objectives Of The Study

The analytical objective of this project is brought into the impact or revenue generation as a tool for economic development.

Secondly, the research is to identify the various forms or sources of revenue generated of the government.
Notice will also be taken of the constraints associated or hampering revenue generation with particular reference to Abia state. Lastly, suggestions will be proffered to the authority concerned on how well to generate more revenue.


1.4 Research Questions

  1. To what extent have the Abia state board of internal revenue created awareness on the need to tax/rate payment in the rural areas.
  2. Is there any measure taken by the Abia state board of internal revenue boost her revenue generation.
  3. In what way have the measure influenced Abia state board of internal revenue.
  4. What are the problems associated with revenue generation in Abia state.
  5. What are the benefits of revenue generation in Abia state, government.

1.5 Significance Of The Study

The Nigerian economy and value of their currency prior to the early 1970’s was buoyant and an object of envy but fortunately or unfortunately, this took a dramatic turn for the worse in the late 1970’s and early 1980’s the Nigeria government is experimenting with some policy or policies which is expected to realize the productive base of the economy in due time.

Interestingly, the Abia state government needs funds for its social service activities. To facilitate this, it creates effective machinery for revenue mobilization.

The Abia state board of internal revenue (BIR) now knows as internal revenue services is under the ministry of finance and economic planning.


1.6 Scope Of The Study

In this study, attention will be focused on general principle of revenue generation by the internal revenue service with special emphasis on the different methods and techniques of taxation, the major sources of revenue actable to Abia state.

By this, the organization structure of Abia state internal revenue service as an established machines for effective tax administration will be examined so as to know what effect it has on the operational framework of the said revenue generation. The study will also cover the methodology of the assessment effective tax administration will be examined so as to know what effect is has on the operational framework of the said revenue generation.

The study will also cover the methodology of the assessment effective and efficient collection and made or accounting to tax and onward transfer of the revenue to the state government.

The problem encountered either during the period of generating the revenue or after, will also be look into. Different loopholes that had jeopardized revenue generating thereby contributing to the failure of the whole tax system will also be discussed. This study will be limited to the operation of Abia state board of internal revenue services as a revenue generating unit.


1.7 Limitation Of The Study

A lot of factors militate against the conduct of this research work. The most inflicting problems was time as it affects the solving of other matters as an adult student in the service of our lord. Other barriers include:

  1. The study made use of questionnaire as an instrument for data collection and the analysis is based on it (the data collected). Thus it may be possible that the respondent answered the questions with bias.
  2. The researcher did not find it easy booking appointment with the officer in charge (OC) and the unwillingness of the custodian of these data from the state government to make it available for at least a photocopy.
    Through this was possible after several attempts which in turn left a huge financial burden on my part.
  3. Even the materials available in the library are grossly outdated while recent journals and other periodicals are not easy to come by.

Since not all the questionnaires were returned, it could equally have an effect in the generalization made from the discoveries. Despite all these, the researcher collected enough data that make the work reliable. These problems did not affect the usefulness.

These problems did not affect the usefulness standard substance of the study.


1.8 Definition Of Terms

In order to have a clear knowledge of what and its generation is all about; it is of most importance to define some of the terms that will be used in this work.

These include tax assessment an employer tax payer, tax defaulter, an agent, income, ford and revenue.

Tax:

Tax in the context of revenue generation could be referred to as a compulsory leery on any person who is said to be a taxable adult with an income earned either on a job done or on a service rendered. It could also be seen as willful payment of any amount of money being stipulated by an authority (usually tax authority) to the government treasury. Tax is of different types, It could be direct or indirect tax, it could be progressive or regressive in nature but the important thing is that it involves some payment of money into the government purse. However, one looks at it, taxation contributes immensely to the government fund.

Assessment:

This is a method of computing a tax payable by a tax payer. Normally, the assessment authority of the board of internal revenue lays down guidelines of assessing a tax payer which is generally accepted in the country the doctrine of assessing tax payer is one of the tax especially personal income tax. In this the person who pays the tax is some how convinced that he is not being cheated or discriminated against by sex or race. Assessment also guarantees equity because person within the same income range pay the same amount for tax.

Through assessment, a high income attracts a high tax while low income attracts how taxes in fact, assessment enable a tax payer to pay according to his or her ability.

An Employer:

The world employee is said to be used in the taxing acts and pamphlets used by the relevant tax authority.
This word is defined as inclusive of any holder of an appointment or office whether public of otherwise for which remuneration is payable.

Employee should re-read as including for example minister, chief, local government, councilor any public servant, company director, secretary pensioner, etc in addition to those more commonly known as employees.

Tax Payer:

A tax payer within the context of taxation may be defined as a person who is under the employment of an employee having remuneration upon which his or her income earned. This category therefore includes persons within and amount the employment of government and persons in the private sector.

A person who is by law made to contribute as a civic responsibility, some amount of money which he or she earned into the government purse. A tax payer normally should fell obliged to pay as at when due.


Tax Defaulter:

A tax defaulter is one who refuses to pay tax. Such a person earns an income but does not either want to pay when he or she likes. In such a case, the tax payer may be said to be in defaults and within the period of the tax operation, a tax defaulter is said to be the enemy of tax authority.


Tax Agent:

A tax agent is usually an employer, appointed by tax authority in a particular locality to collect taxes of taxable adults on behalf of the tax authority.

The pamphlet on employer’s guides has this to say “it is the duty of the employer when directed by the relevant tax authority to deduct income tax in accordance with the direction from the pay of his employees who are subjected to Nigeria income taxation and who are resident for tax purpose in the state of the relevant tax authority”.
By this, an employer is by virtue of being appointed by the tax authority or agent.

Income:

An income is the amount earned by an employee for a specific period of time to a service rendered to an employer. An income earner is expected to pay a certain amount of his earned income to the government. Through it is not all earned income that attracts tax but a remuneration which falls under taxed income that could not be taxed is usually specified by the appropriate tax authority during it statement of tax guidelines.

Fund:

By its ordinary meaning, fund could be defined as an amount of money available which is being specially allocated for the execution of a project for the government of the day to function effectively, it needs fund to operate. Therefore the availability of funds in a state enhances the ability of such administration to operate effectively.

Within the context of revenue generation fund could be seen as the amount generated as revenue which the government uses in the running of its administration. However one may look at it, fund is very important not only to the government but also to an individual person who needs money to meet his or her social needs.

Revenue generated by the board of internal services is deposited in the state treasury as funds which could be drawn at nay given time through the authorization of government finance unit.

Revenue:

This is the needed fund for which the internal revenue service was created. The generation of revenue in Abia state is a priority to the projects and payment of salaries is affected.

The sourcing of government revenue is also carried out by other agents over than the internal revenue service.
There are some government ministries who generate accruable to the Abia state government.

The federal government of Nigeria has urged the different state government to look inward and increase their internally generated revenue so as not to depend wholly on the federal allocation.

With this we could therefore define revenue to be money generated both internally and externally by government which it uses to run the affairs of its administration.


Chapter Five


5.0 Summary Conclusion And Recommendations

5.1 Introduction

In the height of the foregoing in this study, there are some findings which were made, which shall be discussed in this chapter also there are recommendations for amendments, summaries and even conclusion which will be also discuses in this chapter for effective work.


5.2 Summary Of Findings

There has not been a coordinated approach towards tax collection. Whenever there is a tax drive in Umuhia capital city, there has not been a simultaneous tax drive in other parts of the state. This does not make tax payers have any sense of civil responsibility at a particular period.

The activities of all the tax assessment authorities in all the local government areas are not properly coordinated. There has not been a regular situational report at all the activities of tax offices. The management also has not been going on a regular inspection of the tax offices outside the headquarters.

This has culminated into low revenue generation by the tax offices.

The state government releases some money to the internal revenue service for the furnishing of the office and maintenance of a good working environment. It is hoped that this money will be used judiciously by the management of the board. The government has also promised the board new vehicles which will make for effective access to the rural areas for revenue collection.

The chairman of the internal revenue service should be an old staff who grew from the junior staff cadre to the top management level. One expects him to be a product management of the funds available for the running of the tax administration.


5.3 Conclusion

The main objective for the establishment of the Abia state board of internal revenue service has not been fully achieved. The failure or success of the internal revenue service will depend on the joint effort of the Abia state government and the staff and management of the revenue board. No matter, if the prudent management is not instituted in the day to day activities of the board, the question of effective and efficient management of the internal revenue generation in the state will not be solved.


5.4 Recommendations

In my research on the “impart of revenue generation as a tool for economic development with a particular reference to internal revenue service and revenue generation in Abia state, a lot of problems were discovered to hamper the realization of this tangible objectives as mentioned in the previous chapter.

Having gone that far deem it a vital issue like this needs to be addressed. There is no way a workman can perform effectively without tools and shelter.

Government should equipped the officers very well to enable them meet up this challenges.

The management of the board of internal revenue service pursue it with vigour their statutory function by involving in conscious effort and dynamic process of eliminating court elements in it’s rank and file. More so, the Abia State dwellers should be encourage in various ways. Obnoxious Laws or Customer that gags industrialization of the area should be immediately repeated to allow conducive business climate investors.


The Impact Of Revenue Generation As A Tool For Economic Development (A Case Study Of Board Of Internal Revenue Abia State)


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