The main reason for raising fund in
the state is to meet government expenditure. Other reasons for revenue
generation in Ebonyi State include the following:
(i) To
provide free social services such as health and education especially as a
growing (young) state
(ii) Equitable
distribution of Amenities. Revenue generated in this state can assist in the
provision of vital amenities as good roads, Hospital etc.
(iii) The
state government needs revenue to finance capital projects such as
electrifications of rural areas, industrial base and agricultural has
establishment.
(iv) Management
of the economy: there is also need to generate revenue to ensure that the
economy is effectively managed. It encourages economic diversification.
(v) To
ensure and integrated rural development and balanced economic growth and
development of the state to various local authorities for collection of
taxes and rent unfortunately, the available staff of the state Board of
internal Revenue (BIR) is not enough to cover the small area of the state
capital let alone the various local government, development center and
villages.
(iii) The
Guardian (2007) reported that the proposed national tax policy is likely to be
to the advantage of foreign economies rather than the local economy in its
present shape, thus the policy is most likely to constrict domestic output
rather than spawn additional investments it will not create new jobs, smuggling
will rise.
(iv) Lack of
trained, effective and motivated personnel. Tax administration in Ebonyi State
is poor due to lack of trained effective and motivated personnel the machinery
for tax or rate collection is grossly inadequate and inefficient.
(v) Leakages
of Revenue: Most of the revenue so collected are not properly tracked, due to
lack of transparency, bribery and corruption on the side of tax and rate
collectors and the payers, example duplication of book 6A by revenue
collectors, non- submission of returns by agencies, ministries and parastatals.