CHAPTER TWO
LITERATURE REVIEW AND RESEARCH
METHODOLOGY
2.1 LITERATURE
REVIEW
For
clarity of purpose and thorough investigation, the review of related literature
shall be sub- divided into two parts, which are local government and tax
mobilization and generation in Nigeria.
Local Government
Insight
into the concept of local government could be derived by looking at few
definitions or explanation of the term local government by other scholars.
According
to Nwankwo (2002) local government is a government set up by central authority
or state government as a means of ensuring effective administration at the grassroots.
He added that in legal terms, local government is defined as a body corporate, having
perpetual succession and a common movable and immovable properties.
Bello Imam (2001) sees local
government as “that unit of administration with defined territory and power as
well as administrative authority with relative autonomy”.
Emezi C. (1984) defines local
government as a system of local administration under local communities that are
organized to maintain law and order, provide same limited range of social
amenities and encourage cooperation and participation of inhabitants towards
the improvement of their condition of living. It provides the community with
formal organizational framework which enables them to conduct their local
affairs effectively for their general good.
This
implies that the primary function of colonial administration is to maintain law
and order and to initiate and implement certain developmental projects that
will definitely impact on the living standards of the local populace to enable
them work for the interest of the rural and urban dwellers within their
territory and jurisdiction.
Furthermore, a more encompassing definition of local
government and one that captures the relevant indices of local government is
contained in the guidelines for a reform of local government in Nigeria.
According to the guidelines, a local government is:
Government at the local level
exercised through representative council established by law to exercise
specific powers within definite areas. These powers should give the councils
substantive control over local affairs, as well as the staff and institutional
and functional powers to initiate and to direct the provision of services and
to determine and implement projects, so as to complement the activities of the
state and federal government in their areas, and to ensure through active
participation of the people and their traditional institutions, that local
initiates and response to local need are examined. The above definition implies
that there are essential distinguishing characteristics of local government
which are also well articulated in scholarly works of the united Nation and
many others respectively. Orewa and Adewumi describe local government as:
An essential instrument of national or state
government for the performance of certain basic services, which can best be
decided upon and administered locally in the intimate knowledge of the needs,
conditions and petulancies of areas concerned. It unites the people in a
defined area in a common organization whose functions are essentially
complimentary to those of the central government in the interest of the local
residents of satisfaction of common community need…….Consequently, its
effectiveness is judged through the developments it generates, social amenities
it provides, and to what extent it has catered satisfactorily for the happiness
and general well being of the communities it has established to serve.
2.1.1 Features
of Local Government:
1. Localness:
This particular feature implies that local government
Is the lowest tier of government, it is government at
the grassroots or local level. Consequently, local government is subordinate
but subservient, to the central or federal or state government.
2. It has
a legal existence enshrined in the constitution as in Nigeria. This protects it
from arbitrary actions of higher authority. As a legal entity, it can sue or be
sued and has a perpetual succession. This implies that the life of local
government does not expire with the end of each administration.
3. It
enjoys substantial autonomy. Although local government are subject to state or
federal government control in certain areas, they enjoy a reasonable degree of
independence in administrative and financial affairs, such as hiring, control
and discipline of their own staff subject to a certain upper limit, the
preparation of animal estimates or budgets, and the execution of certain
projects.
4. It exists within a defined territory
5. Local
government exercises its authority over a given population, In other words, as
a co-pirate entity; local government is created to serve citizens resident in a
known location.
6. It exercises
specific powers and performs certain functions as enshrined in the constitution
or statues as in Nigeria.
7. The
council is composed at the elected representatives of the local people.
8. Local
government is usually divided into departments, divisions or units which
facilitates the accomplishment of its good, objectives and function.
Aims for the creation of local
government as stated in the guideline for the 1976 government reforms. The
principal aims the local government are.
a. To make
appropriate services and development activities responsive to local wishes and
initiatives
b. To
facilitate the exercise of democratic self government close to the local levels
of our society and to encourage initiative and leadership potentials.
c. To
mobilize human and material resources through the involvement of members of the
public in their local development and
d. To
provide two – way channel of communication between local communities and
government (both state and federal).
The local governments are expected
to bring government to the rural people. They are to carry out developmental
services in the rural communities.
Succinctly, Ojo (2009) opined that
in recent times, lads of funds have often been attributed as a major problem
which has hindered effective and successful execution and completion of many
public projects at the local government level. However, experience has shown
the contrary. Poor tax mobilization and generation rather than inadequate
finance is the bane of local government inability to achieve substantial development
in their own domain. In a book titled Nigeria journal of public administration
and local government, it was pointed out by Agubuzu L.O.C. (1985), that the
council relax and depend on the government for most of the funding and had
neither the staff nor the will to do old and new areas of raising finance. The
local government are therefore has no financial stability and autonomy. With the
above assertion by Agubuzu O.I.C. it is allocation which make them lack
precision towards generating more revenue from internal sources. Moreover, the revenue
staff are not adequately oriented on the revenue generation system. All these
points by Agubuzu are quite acceptable but do not proffer possible way of ameliorating
the problem as in the area of staff and revenue.
Ronald Waith (1964) in his
contribution, he added that “local government must be seen against an economic background
to achieve credibility” local government has to go one step forward and create
wealth through tax, that is to assist in the revenue generation to the benefit
of the local government.
One aspect to be looked into in tax
generation and mobilization in Nigeria local government system is financial
accountability.
Ehow Business Accounting (2010)
defined financial accountability as a specific type of accounting that is used
by businesses to prepare report on the finances of a firm and local government
for people outside of the organization such as stakeholders or government agencies.
It is governed by specific accounting standards to ensure uniformity in
reporting.
Financial accountability in tax
generation is necessary because of the number and variety of people who are affected
by the behaviors and action of government. One group of people who need to know
what is going on are the electorates. Indeed the general public have the right
to know the account of the public revenues accrued from taxation. Also, the
employees and elected representative will want to know how public funds
generated through tax are expended. This is to buttress the fact that public
fund is public interest
In resent times, the issue of tax
mobilization generation has come to the forefront due to a number of high
profile scandals.
Adsnsji (1970) blames the
ineffectiveness of local government tax mobilization and generation on the
following reasons:-
a. Lack of mission or lack of
comprehensive functional roles
b. lack
of proper structure (ie the role of local government) in the development
process was not known.
c. Low quality of staff
d. Poor tax generation
Nevertheless, these problems had
been partially addressed by the 1976 local government reforms. The
responsibilities of the local government are Cleary stated in the constitution.
They also have a share from the federal and state government fund. Though the
states are not faithful remitting to the local government their share from the
internally generated revenue which includes funds generated from tax. Sometimes
the states also usurp some tax generation and mobilization functions of local
government and encroach on their tax resource base.
Again, the issue of low quality of
staff in the local government system is now a thing of the past as many hands
are now employed to the local government but those ones employed are not
faithful. The fact is that local government new engages the services of
untrained, fraudulent and dishonest staff who swindle out fund realized from
tax from the government. The problem of local government is not the number of
staff employed but high rate of corruption.
The fact was buttressed by Ndubuisi
(1998), he stressed that local government problems of tax generation is the
cute of corruption, fraud and embezzlement. Although tax generations are
inadequate, the tax so generated are largely mismanaged by the tax collectors
and the top politicians as well as civil servants controlling the system.
Wraith (1972), argued that local
government have both mandatory and permissive power to generate tax. But in west
Africa, he stated that local government are dependent on the other theirs of
government are financially and otherwise thus, they are subject to control
because they are not viable on their own.
In the view of Adedeji (1979), the
success or failure and effectiveness and ineffectiveness’ of tax generation
must depend on tax generation powers available to individual local government
and the way those monies are expended. Similarly, in Nigeria and Ebonyi state in
particular, local government are mere appendage of the state government. The
state governor and his assembly members decide who should become chairman of
any local government. The activities of the chairman are controlled by the sate
government. The elections of the local government chairman are telaguided and
masterminded by the governor. The election favours only the governor’s
candidate who will always be loyal to the dictate of the governor. If the
chairman can convince the governor that he will be accountable to him by aiding
and abetting tax fraud, he will always be elected into the council. The
electorates have no powers to decide who should be the local government
chairman because their votes do not count.
Consequently, local government
chairman are not responsible to the electorates rather they are responsible to
the state governor.
In the final
analysis, the effectiveness or efficiency
of the local government tax mobilization and
generation may be enhanced if there is transparency in tax generation network
of the local government. This is because tax mobilization and generation is a veritable
tool for effective local government administration. Hence, there is a link
between tax mobilization and generation and prudent local government
administration.
2.1.2 Problems
Generally, the local government is faced with myriads
of problems ranging from corruption and embezzlement, poor financing,
mismanagement of funds to poor leadership. However the major concern of this
research is the problems of tax mobilization and generation.
The researcher in the course of his
research work finds the following as the major problems militating against tax
mobilization and generation in Nigeria local government system with special
reference to Ohaukwu local government Area of Ebonyi state.
a. Shortage of Well Trained and Qualified Personnel.
In Ohaukwu local government, there is shortage of well
trained and qualified personnel which suppose to serve as tool for collection
of taxes and rates. The few that are available are not properly trained in
efficient tax mobilization and generation process. Also the local government is
short staffed to carry out this duty.
b. Inability of the Local Government to Employ
Qualified Staff.
The local government lack the capacity to attract and
retain the right caliber of staff to articulate plans and execute programmes
and projects in order to transform the live of the grassroots people through
taxation.
c. Tax Avoidance and Evasion
Another problem facing local government council in the
area of tax mobilization and generation is tax avoidance and evasion. Many tax
payers in Ohaukwu local government avoid and evade tax. Most populace do not want
to pay tax and can go to any length to evade tax payment.
d. Limited Scope of Taxation.
There is just few areas by which the local government
are allowed by the constitution to collect tax.
Greater percentage of the taxable scope goes to the federal government
and the state while very few areas are left for the local government to collect
tax from the tax payers.
e. Corrupt and Insincere Tax Collectors
There is a lot of insincerity and unfaithfulness on
the part of the Local Government. The tax collectors usually divert the revenue
generated through taxation to their personal use thereby denying the Local
government a huge form of money which should have been used to provide
developmental amenities to the rural dwellers.
f. Ignorance of the Importance of Taxation.
Many people erroneously think that the money they pay
as tax is for the tax collectors. They therefore ignorantly refuse to pay tax.
g. High cost of mobilization
The government sometimes spend much money to mobilize
the tax collectors to go and collect tax from the payers. At the end the tax
collector come back with no tax collected.
h. Mismanagement
of Government Fund:
Embezzlement and Misappropriation of fund by those at
the corridors of power kill people’s interest to fulfill their civic obligation
at paying tax.
I. Lack
of Provision of Amenities
Many people with the belief that the money they pay as
tax is used only for the provision of social amenities do not pay tax if these
anticipated amenities are not provided.
j. False
Declaration of Income:
Many workers especially those in private firms do not
declare their real income thereby posing difficulty for tax assessment officer to
determine amount to collect as tax.
k. High
Cost of Taxation:
High taxes scare the potential payers away. They will
resort to any known trick to avoid or evade tax payment because tax changed is too
high.
2.2 HYPOTHESIS:
In
an academic research of this nature, it will be expedient to provide hypothesis
to serve as a guide in the process of finding solutions to the identified
problems of tax mobilization and generation in Nigeria Local government system
with special reference to Ohaukwu local government area of Ebonyi state.
2.3 Operationalization
of Key Concepts:
i. Local Government: government of
the third tier in a federal arrangement. The grassroot government that is very
close to the rural dwellers established by Law to carry out government
activities. It is an agency of the government.
ii Tax: Tax is a compulsory payment made
by each eligible person towards the expenditure. The primary purpose of taxation
is to raise revenue for the government. Government also uses taxation to
promote economic and social policies.
iii, Tax Mobilization: To work together or
collectively in order to achieve a particular taxation aim. Tax mobilization is
the organization of a group of people to collect tax revenue to the government.
iv, Tax Generation: The production of
tax or the creation of taxation to the government.
v Nigeria: Nigeria the largest country in
West Africa with 36 state and 774 local government area, with over 160 million
people.
vi Tax evasion: crime of deliberately not
paying taxes that you should pay.
vii Tax avoidance. Ways of paying only the
smallest amount of tax.
viii Problem: A thing that is difficult to
deal with. A thing that difficult to undertake. Problems at tax mobilization
and generation challenges of taxation in Nigeria local government
ix Prospects: The chance of being
successful. Brighter future for local government tax mobilization and
generation in Nigeria.
2.4 Methodology:
2.4.1 Methods of Data Collection.
The methods of data collection for this research work
include primary and secondary sources. The primary source includes personal
interviews, observations and personal experiences. Indeed the researcher acted
as a participant observer. The secondary source of information includes textbooks,
journals, interviews, government publications, lecture notes and local
government financial documents and questionnaire.
Analysis
2.4.2 Method
of Data Analysis
In this work, the method of data
analysis was borrowed from Enc, (1998), inferential statistic method which
sates that sample result are used to draw conclusion about the population from
which the sample is drawn. Questionnaires were also administered to the
respondents in their houses and offices and were collected two days later. The
researcher then used empirical study which enabled him to understand then
problem of tax mobilization and generation in Nigeria local government system
with special reference to Ohaukwu local government area of Ebonyi state.
2.4.3 Area
of Study
The
area of study for this research work is Ohaukwu local government area of Ebonyi
state. All the (16) communities in the local government cannot be studied consequently,
the communities selected for the study are only (6) they include Umuagara -
Izhia, Amilce, Okposhi-Eheku, Ukwagba and Wigbeke in Effium.
2.4.4 Population of the Study
As the name implies, Ohaukwu Means large – people. Ohaukwu
local government area is densely populated. The 2006 population report recorded
over 196, 337 people.
2.4.5 Sample
and Sampling Procedure
Due to the difficulties involved in studying the
entire population of the local government six (6) communities were randomly selected.
One hundred and (140) respondents were selected from the communities. And sixty
(60) council workers most of the populations were selected from the finance
department to make a total of two hundred respondents. The structured questionnaires
were administered on those selected persons to elucidate information.
Sample Error
Sample error or estimation is the error caused by
observing a sample instead of the whale population. Mathematically, it is the
difference between the sample and the whole population (ie 196, 337 – 200 =
196, 137).
2.4.6 Validity
of the Instrument
Validity means the degree to which the instrument and
statistical analysis measures what the researcher wants to measure (Mc Nabb,
2005).
Here, the researcher applied both
content and face validity to ensure validity of the instrument. During the pre–test,
some ambiguous questions were found and corrected by the project supervisor who
certified its validity before the researcher went ahead to issue it out to the
respondents.
2.4.7 Reliability
of the Instrument.
The
researcher administered the questionnaire by himself. He conducted a pilot study
of the questionnaire. This is to make sure that the respondents especially the
semi-literate ones were free from being bias. The researcher noticed that the
respondents were consistent in their responses.
2.4.8 Administration
of the Instruments
The structured questionnaires were administered to two
hundred respondents who were randomly selected from six major communities in Ohaukwu
local government area and the local government council. The questionnaires were
administered separately by the researcher. The responses of the respondents
were presented in statistical table for easy analysis.
2.5 THEORETICAL
FRAMEWORK
The theoretical framework for this research is based
on scientific management theory. The founder of scientific management is
Fredrick Winslow Taylor (1856 – 1917). His idea of scientific management were
developed in his books; shop management (1903) and principles of scientific management
(1911).
Scientific management sought to increase output by
discovering the fastest, most efficient and least cost production method. The
bases of scientific management are efficiency and economy in his book, “the
principle of scientific management”, Taylor stated that the principal object of
management should be to secure the maximum property for the employer coupled
with the maximum prosperity for each employee. For the employer maximum prosperity
means not just large profit in the short term but the development of all
aspects of the enterprise to a state of permanently prosperity.
For the employer maximum prosperity not just immediate
higher wages his development so that he may perform efficiently in the highest
grade of work for which his natural abilities fit him.
According to Ugo (1999), the
scientific management principles were based on a systematic study of work to
discover the most efficient method at performing the job and then a systematic
study of management leading to the most efficiency methods of controlling the
workers.
According to Taylor, for the Principles of
Scientific Management are:
1. Develop
a science of each element of man which replaces the old rule-of thumb method
2, Schematically
select and train, teach and develop the worker to make him efficient.
3. To
bring together of the science of work and the scientific selection and training
of men.
4. The
constant and intimate cooperation of management and work men.
From the analysis of scientific management theory, it
could be deduced that, Taylor was interested in how managers could control and coordinate
the performance of task so as to improve organizational efficiency. His
emphasis was on how to improve productivity in any given organization. However,
Taylor do not consider labour side of work. He assumed human beings can always
be influenced by cash reward. He subject human being as adjoint of machine.
APPLICATION OF THEORY TO THE STUDY
Following the scientific management principles of
efficiency in productivity or service delivery, this research work is based on
local government tax mobilization and generation in Nigeria: Problems and
prospects. Indeed it has been widely acclaimed that local government in Nigeria
are inefficient in terms of service delivery, this high rate of bribery and
corruption, wastage of finance and recklessness in spending. Conspiracy and looting
of tax proceeds, unaccountability to the tax payer, collusion and embezzlement,
forgery, avoidance and evasion, and untrained tax staff personnel and a host of
other problems.
In the high of the above, there is need to adopt scientific
measures to ensure efficiency in service delivery in the area of tax
mobilization and generation.
Workers and elected local government officials should be
trained and controlled to be efficient in service delivery. There should be
feed back mechanism to keep the tax payers abreast of the activities of the local
government. In order to attain effective tax mobilization and generation in the
local government, there should be effective monitoring of the tax field workers.
Again, efficiency in the local government tax
mobilization and generation in Nigeria may be achieved by employing God-fearing
and qualified tax officers to run the affaires of tax generation. There is also
need for frequent human capacity training to keep the tax officers on the
latest trends in tax mobilization and generation.
Tax mobilization and generation if well harnessed will
guarantee higher productivity in Ohaukwu Local Government Area of Ebonyi State.
CHAPTER FOUR
DATA
PRESENTATION AND ANALYSIS
4.1 DATA
PRESENTATION
Having discussed the literature review and
methodology, it becomes imperative to present data and information gathered
from the field, so as to analyze and prove the validity of the hypothesis
formulated for this research.
In carrying out this work, the research has carefully interviewed
a total of 200 persons from six major communities of Ohaukwu local government
Area and the council. The people were selected through the stratified sampling
technique and administered with the structured questionnaires. They were
interviewed separately and their responses are represented in statistical table
for easy analysis as follows.
SECTION A: DEMOGRAPHIC DATA
Question 1: How old are you?
Table 1(a): Ages of Respondents
|
Age of Respondents
|
Frequency
|
Percentage
|
|
11
years – 30 years
|
30
|
15%
|
|
31
yrs – 50 yrs
|
120
|
60%
|
|
51
yrs – 70 yrs
|
40
|
20%
|
|
71
yrs – 90 yrs
|
10
|
5%
|
|
Total
|
200
|
100%
|
Source field work 2013
Table
1a above shows that 15% of the respondents are between the ages of 11 years, 60%
of the respondents are between ages 31 years – 50 years, 20% of the respondents
are between ages 51years – 70 years, and 5% of the respondents are between ages
71 – 90 years
This
implies that majority of the respondents are between the ages of 31yrs – 50
years. It is believed that this age group constitutes the labour force. The
average is 44 years.
Question 2a Your Sex.
Table 2a: the Sex of the Respondents
|
Sex
|
Frequency
|
Percentage
|
|
Male
|
112
|
56%
|
|
Female
|
88
|
44%
|
|
Total
|
200
|
100%
|
Source: field work, 2013
Table
2a, indicates that 56% of the respondent are male while 44% of the respondent
are female. This shows that men are more on the ground on community matters and
in the politics in the local government
Table 3a Marital Status
|
Respondents
|
Frequency
|
Percentage
|
|
Married
|
120
|
60%
|
|
Single
|
40
|
20
|
|
Widowhood
|
28
|
14%
|
|
Separated
|
12
|
6%
|
|
Total
|
200
|
100%
|
Source:
field work 2013
Table
3a above shows that, 60% of the respondents are married, 20% are single, 14% of
the respondents are widow and 6% of the respondents are separated. It is
imperative to note that the married class forms the most responsible group and
they are the bulk of the tax payers in any society.
Table 4a Religion
|
Respondent
|
Frequency
|
Percentage
|
|
Christianity
|
174
|
87%
|
|
Muslim
|
8
|
4%
|
|
Traditional
religion
|
18
|
9%
|
|
Total
|
200
|
100%
|
Source: field work, 2013
Table
4a above shows that 87% of the respondents are Christians, only 4% percent are
Muslims, 9% of the respondents are traditional religion believers. This proves
that the majority are predominantly Christians. Therefore they should be honest
in their response.
Table 5a: Occupation
|
Respondent
|
Frequency
|
Percentage
|
|
Civil
servants
|
82
|
41%
|
|
Self
employed
|
20
|
10%
|
|
Farming
|
58
|
29%
|
|
Trading
|
12
|
6%
|
|
Students/unemployed
|
28
|
14%
|
|
Total
|
200
|
100%
|
Source: field work, 2013
Result
of table 5a above shows that 41% of the respondent are civil servants, 10% are
self employed, 29% of the respondents are farmers, 6% are traders while 14% of
the respondents are students and unemployed members of the society. This
implies that the majority of the respondents are civil servants others are
doing one thing or the other to earn a living.
Table 6a Education
|
Respondent
|
Frequency
|
Percentage
|
|
Primary
|
44
|
22%
|
|
Secondary
|
80
|
40%
|
|
NCE/OND
|
36
|
18%
|
|
Higher
education
|
40
|
20%
|
|
Total
|
200
|
100%
|
Source: field work, 2013
Table
6a: Education indicates that 22% of the respondents have only primary
education, 40% have secondary education, 18% respondents have NCE/OND and 20%
attended high institution. This indicates that majority of the population
attained secondary level and they constitute the numbers that are employed to
collect tax for the local government.
Table 7a Ethnicity
|
Respondent
|
Frequency
|
Percentage
|
|
Hausa
|
20
|
10%
|
|
Yoruba
|
10
|
5%
|
|
Ijaw
and others
|
10
|
5%
|
|
Igbo
|
160
|
80%
|
|
Total
|
200
|
100%
|
Source: field work, 2013
Result
of table 7a above shows that 10% of the respondents are Hausa, 5% are Yoruba,
5% are Ijaw and other tribes while Igbo has the majority. However, the result
shows that the Igbos in the local government are very hospitable, friendly and
accommodative
SECTION B
Research Question 1b: Are there Sufficient
Number of Trained and Qualified Tax Officers in the Local Government Service?
|
Respondent
|
Frequency
|
Percentage
|
|
Yes
|
62
|
31%
|
|
No
|
116
|
58%
|
|
I
don’t know
|
22
|
11%
|
|
Total
|
200
|
100%
|
Source: field work, 2013
Result
of table 1b above shows that 31% of the respondents agreed that there are sufficient
number of trained and qualified tax officers in the local government services,
58% says ‘no’ and 11% of the respondents say they do not know. From the above result,
majority of the respondents said ‘No’ hence, there is no sufficient number of
trained and qualified tax officers in the local government service.
Research Question 2b: Does the local
government council send their tax officers to periodic training and workshop?
|
Respondent
|
Frequency
|
Percentage
|
|
Yes
|
34
|
17%
|
|
No
|
140
|
70%
|
|
I
don’t know
|
26
|
13%
|
|
Total
|
200
|
100%
|
Source: field work, 2013
From
the table 2b above, it shows that 17% of the respondents said that the council
sends her tax officers to periodic training and workshop, 70% says ‘No’ that
the local government does not sent their tax officers to periodic training and
workshop, 13% says they don’t know. This shows that Ohaukwu local government
does not sent their tax officers to periodic training and workshop.
Research Question 3b
Are all the Local Government tax
officers Responsible and Accountable?
|
Respondent
|
Frequency
|
Percentage
|
|
Very
irresponsible
|
154
|
77%
|
|
Very
responsible
|
34
|
17%
|
|
Partially
responsible
|
12
|
6%
|
|
Total
|
200
|
100%
|
Source: field work, 2013
Responses
from table 3b shows that 77% majority of the respondents agreed that the local
government tax officers are very irresponsible and unaccountable, 17% of the
respondents agreed that the tax officers are very responsible while only 6%
said that the local government tax officers are partially responsible. The result
shows that majority of the local government tax officers are highly
irresponsible and they do not render account to the local government council.
Research Question 4b: Does the Local
Government carry out Public Enlightenment Programmed to the Tax Payers?
|
Respondent
|
Frequency
|
Percentage
|
|
Yes
|
140
|
70%
|
|
No
|
34
|
17%
|
|
I
don’t know
|
26
|
13%
|
|
Total
|
200
|
100%
|
Source: field work, 2013
From
table 4b above, it shows that 70% of the respondents says that the local
government says ‘No’ meaning that they do not carry enlightenment programmes to
the tax payers, 17% says that ‘yes’ that they carry out public enlightenment
programme and 13% said that they do not know.
The result shows that the majority
are at the opinion that the local government does not carry out public
enlightenment programme to the tax payers.
Research Question 5b: Is the money spent
on mobilizing the tax field officers commensurate with their returns?
|
Respondent
|
Frequency
|
Percentage
|
|
Yes
|
160
|
80%
|
|
No
|
24
|
12%
|
|
I
don’t know
|
16
|
8%
|
|
Total
|
200
|
100%
|
Source: field work, 2013
From
table 5b above, it shows that 80% of the respondents says ‘No’ 12% of the
respondents says yes while 8% of the respondents said that they don’t know. The
result shows that 80% which is the majority of the respondents said that the
money spent on mobilizing tax field officers is for below the returns the bring
to the office.
Research Question 6b: Do all the legible
tax payers pay their taxes as and when due?
|
Respondent
|
Frequency
|
Percentage
|
|
Yes
|
34
|
17%
|
|
No
|
134
|
67%
|
|
I
don’t know
|
32
|
16%
|
|
Total
|
200
|
100%
|
Source: field work, 2013
Responses from table 6b shows that 17% of the
responses says ‘yes’ that all legible tax payers pay their taxes as and when
due, 67% says ‘No’ that all the legible tax payers do not pay their taxes as at
when due while 16% said that they don’t know whether all legible tax payers pay
their taxes as and when due or not.
Research Question 7b: Does the Local
Government executives appropriate the money realized from tax to the benefit of
the tax payers?
|
Respondent
|
Frequency
|
Percentage
|
|
Yes
|
30
|
15%
|
|
Partially
|
40
|
20%
|
|
Not
at all
|
130
|
65%
|
|
Total
|
200
|
100%
|
Source: field work, 2013
Result
of responses table 7b indicates that 15% of respondents affirm that local
government council executives appropriate the money realized from tax to the
benefit of the tax payers, while 20% says there is partial appropriation of the
money realized from tax to the benefit of the tax payers and 65% says there is no
benefit at all to the tax payers. This implies that the local government council
executives do not expend tax payers money to the benefit of the tax payers.
Research Question 8b: What are the
problems of tax mobilization and generation in the Local Government council?
|
Respondent
|
Frequency
|
Percentage
|
|
Insincere
and corrupt tax officers
|
32
|
16%
|
|
Insufficient
and unqualified manpower
|
36
|
18%
|
|
Improper
mobilization of tax officers
|
22
|
11%
|
|
Tax
evasion and avoidance
|
46
|
23%
|
|
All
of the above
|
64
|
32%
|
|
total
|
200
|
100%
|
Source: field work, 2013
The
result of table 8b indicates that 16% agreed that insincere and corrupt tax
officers is a problem of tax mobilization and generation in the local
government council, 18% indicates that unqualified manpower is a problem facing
local government tax mobilization and generation, 11% is of the opinion that
improper mobilization of tax officials is a problem in tax generation, 23% says
that tax evasion and avoidance is the problem facing tax mobilization and
generation in the local government while 32% affirms that all the problems
enumerated are problems in the local government tax mobilization and
generation. However, the responses show that all the problems mentioned above are
really problems facing tax mobilization and generation in Ohaukwu local
government council.
Research Question 9b: What measures can
be adopted to improve tax mobilization and generation in the Local Government Area?
|
Respondent
|
Frequency
|
Percentage
|
|
Government
should employ only qualified tax officers
|
20
|
10%
|
|
Insincere
and corrupt tax officials should be disciplined when they are caught to serve
as deterrent to others.
|
40
|
20%
|
|
There
should be adequate tax enlightenment campaign organized by the council
|
10
|
5%
|
|
The
local government should expend money realized from tax to the benefit of tax
payers
|
10
|
5%
|
|
All
of the above
|
120
|
60
|
|
total
|
200
|
100%
|
Source: field work, 2013
Result
of respondent table 9b above show that all the suggested measure can improve
local government tax mobilization and generation in Nigeria local government system.
However, among them, insincere and corrupt tax officials should be thoroughly disciplined
to serve as deterrent to others. This is because the dupe the tax payers and
also dry the treasure of the government thereby leaving the government impotent
and ineffective.
4.2 FINDINGS
Following
the above data presentation and analysis, the following are the findings of the
research work.
1. Insufficient Manpower: The local
government tax mobilization and generation is inefficient because they lack
trained and qualified manpower to make tax mobilization and generation effective.
The few number of qualified staff they have cannot carry out the task effectively
because of the vast nature of the local government area. They staff are not
also exposed refresher course or training.
2. Corruption and Embezzlement of Tax Revenue:
In the course of the research work, it was found that Ohaukwu tax
mobilization and generation suffer a lot of set back because of corrupt tax
officials. There is a lot insincerity at all levels of tax administrators
ranging from the tax agents to the tax collectors down to the tax task forces and
worse still the local government chairman who sometimes embezzles the fund
because they are over–protected by the state chief executives.
3. Lack of Mobilization and Enlightenment Programme:
Tax mobilization and generation in Ohaukwu local
government area is found to be ineffective because there is no mobilization of
the tax officials. There is no vehicle to take the staff to the hinterland to
access tax payers. The tax payers are not properly educated on the importance
of paying taxes. The tax adhoc staff of the council are not given proper
orientation.
4. Tax Evasion and Avoidance:
In the course of the research work, it was observed
that a good number of the eligible tax payers run away from paying tax, others
pay just part of what they are supposed to pay. This is largely due to economic
life of the tax payers. Majority of the eligible tax payers are poor and cannot
afford even three square meal talk more of paying tax. It is observed that it
is only the civil servants and few order that pay their taxes
5. Non-Provision
of social amenities:
The data analysis show that tax mobilization and
generation of Ohaukwu local government is at the lowest ebb because the council
does not consider the interest of the tax payers by providing them with social
amenities. They don’t benefit anything from the local government after paying their
taxes. Since there is no provision of these amenities that would serve as
morale booster, they consider paying tax as waste of fund.
6. Poor Remuneration and hostile attitude
towards tax officials:
In the course of the study, it is observed that some of
the tax officials are tempted to covert tax revenue fund to their personal use simply
because of poor motivation and Remuneration. Local government tax officers are
poorly paid. The communities, staff of the council as well as the state tax
officers are all hostile to the local government tax officers and the suspicion
it based on the assumption that they extort money from tax payers and do not account
to the government.
4.3 Discussion
of Findings
Financial recklessness, misappropriation
of tax revenue, embezzlement, abuse of office and pursuance of private interest
has become the order of the day in local government because of poor tax
mobilization and generation in Nigeria local government system. The list is
inexhaustible. The unpatriotic life style of the tax payers is really a matter.
The inability of the local government council to adequately mobilize its tax
officials for effective taxation is a hydra headed problem. All these problems
amount to inefficient performance in the service delivery task of the local
government. It is obvious that one of the major reasons for the creation of
local government area is to deliver services to the rural populace. This study indicates
that the local government are no longer interested in service delivery through
tax revenue, their interest is now how to share federal allocations.
Another implication of the findings indicates
that poor performance of the local government has resulted to apathy on the
part of the tax payers. The tax payers have lost interest on the activities of
local government because the local government has failed to finance its fiscal
policies and level of development is very low. Tax payers are not respected and
are not accommodated in the scheme of affairs. The local government council
recruits touts who embarrass and torment tax payers, thereby denying them their
fundamental human right.
Also, it is worthy to note that
there are cases of institutionalized corrupt practices. Tax authorities, tax
assessment officers, tax agents, tax collectors and other tax officers collaborate
with tax payers to under-asses tax payers. They sometimes aid and abet tax
evasion and avoidance. other tax officials collect tax revenue for which they
issue fake receipts and the tax so collected not paid to the council. Others collect
tax without issuing receipts to the tax payers
It is observed that huge sum of
revenue are lost by local government to corrupt tax collectors, licensing
officers, collectors of fees and fares, market masters and valuation officers who
sometimes collude with corrupt tax payers and company owners so that their
tenements are under-assessed or they completely escape valuation and rating. It
is a vicious crime. All these account for slow development pace and low productivity
and inefficient service delivery in the local government system in Nigeria.
CHAPTER FIVE
SUMMARY, CONCLUSION AND RECOMMENDATIONS
5.1 SUMMARY:
In
this study, the researcher has been able to investigate the issue of local
government tax mobilization and generation: problems and prospects in Nigeria
local government system with a case study of Ohaukwu local government area of
Ebonyi state.
The local government is currently
controlled by elected chairman and councilors. The are being assisted by career
civil servants. They all take part in tax mobilization and generation in the
local government. There is total collapse in the area of tax mobilization and
generation probably because of over dependence in monthly statutory allocation.
The chairman of the council and the councilors are not given the needed
financial and moral support to the career civil servants who are supposed to be
collecting taxes for the local government. The over-dependence in statutory allocation
has gradually reduced the amount of internally generated revenues. But we
forget that if anything should happen to the oil revenue from where the allocation
comes from, what will be the fate of the country? The study has brought to the limelight
that poor performance of local government is as a result of poor tax
mobilization and generation in the system. Local government tax mobilization
and generation has been hindered by the following factors:- corruption,
embezzlement, poor mobilization, tax evasion, institutionalized corrupt practices,
non-challant attitude, insincerity and over-dependence in statutory allocation.
The major implication of the finding
of the research work is that poor tax mobilization and generation has made
local government not to be effective in the discharge of their statutory
services to the masses at the grassroots.
Consequently, for the local
government to be efficient and viable, effort must be doubled in the area of
tax mobilization and generation. Secondly tax payers should be motivated
through citing of social amenities in their respective domains to enable them benefit
from their hard-earned money. Moreso, government should embark on intensive
public enlightenment campaign where tax payers will be made to understand that
payment of tax is their statutory obligation to the government. Government and
all the accredited disciplinary agents like EFCC, ICPC and others should bring
to book corrupt council chairmen and other tax fraudster to serve as deterrent
to others.
Prospects of Local Government Tax Mobilization
and Generation in Nigeria
Local government tax mobilization and generation
machinery should be properly enhanced to catch up with the aspiration of the
masses. Local government in Nigeria are no longer there to discharge only
administrative functions but they are highly involved in collective
participation in governance, encourage physical and fiscal economic development
though parity, create the conditions for employment within their localities and
provide social amenities through revenue accruing from tax generation. These social
services will improve the well-being of their people.
The 1976 Reform has given local
governments in Nigeria a sort of radical transformation from being an appendage
of state government to a very important and autonomous third tier of
government. With this reform, local government become a legal and
constitutional entity with properly defined tax mobilization and generation
functions as well as guaranteed sources of revenue.
Local government should strive towards
improving tax mobilization and generation strategy and instill transparency and
accountability in their tax generation structure. This can be effectively carried
out through community enlightenment and community participation in the various tax
mobilization and generation activities. There is need that the tax payers are carried
along in the tax administration. This would make even the community to join hands
with the government tax officials to fish out tax evaders thereby improving the
tax revenue base of the local government.
5.2 Conclusion
According to Adedeji (1969) as cited in Ezeani, (2006:
261), “The success and failure and the effectiveness of local government and
financial resources available to the individual local authorities and the way
these resources are utilized.
In a related development, Orewa (1988:1) states that
“financial management in the context of local government is the discipline on
the part of the leadership, management and staff of the local government to
prepare a realistic annual budget, collect revenue efficiently, and put into
effective use the resources of the area at acceptable standard”.
Indeed, tax mobilization and generation
is a necessity for effectiveness of local government. In European counties, tax
is the major source of revenue generation for the government. Efficient tax
mobilization and generation can be guaranteed by means of financial sanity and
accountability. When there is sincerity on the part of local government council
and all the tax officials, then efficiency and effectiveness of local
government can be ensured.
It is therefore remanded that only
suitably qualified and trained tax officers should be employed and retained for
effective tax administration.
The knowledge base of the council
should be improved. This will enhance
performance at the local government level. When all the eligible tax payers are
pulled into the tax net, the ailing local government economy will rise from
grass to glamour. This is in line with the global best practices.
5.3 Recommendation
Having identified the problems of local government tax
mobilization and generation in Nigeria local government system, it becomes
imperative to make some recommendations to remedy the situation and move the
local government system forward
1. Employment of Qualified Staff
Local government should employ only suitably qualified
and well trained staff to take charge of tax administration at the local
government.
2. Insincere Tax Officials Should be Disciplined
Corrupt and miscreant tax officials who indulge is
series of fraud should be thoroughly disciplined to serve as deterrent to
others.
3. Staff Motivation
According to Henry Fayol, he defined motivation as a
driving force which stimulates a worker into action. Tax officials should be
adequately encouraged so that they can put in their best.
4. Training of Tax Officials
Training of tax workers for knowledge enhancement will
make tax workers more efficient in their job. Training will impact more skills of
tax mobilization and generation techniques.
5. Tax Education
The tax payers should be given tax education to
enlighten them in the need to pay their taxes as and when due. They should be
made to know the importance of paying tax.
6. Loyalty of Tax Payers
It is important to recommend that tax payers should be
loyal Tax payment is a sure way through which citizens demonstrate patriotism.
7. Tax Mobilization
The local government should source out best ways of
mobilizing taxation in the council area. Functional staff buses should be
provided to the internal revenue to enable them have access to all the nooks and
crannies of the council because Ohaukwu is very vast.
8. Internal Control Mechanism
Local government has to establish a good internal control
system. This will help to monitor the activities of revenue staff. It will
ensure that all taxes collected are accounted for and expended for the interest
of the tax payers.
9. Good Leadership
The chairman of the council should be a person of high
moral value. The council chairman should possess leadership quality of Integrity,
accountability and prudence. He should academically sound so that he can
perform his duties and onus effectively.
10. Maximum Support to the Tax Officials
The local government chairman, staff of the council
and the entire community should give maximum support to tax officials to enable
them embark on tax drive and exploit all tax revenue without fear and molestations.
11. Financial Regulation
Finally, there should be regular financial regulations
from the federal and state government to regulate the tax activities of the
local government system in Nigeria. Financial instruction and procedure should
be kept as simple as possible.
As an interim measure state and federal government should
adopt massive and short duration training packages designed for the various cadres
and in hierarchy. This is aimed that improving knowledge base and enhance
effective performance at the local government system in Nigeria.
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GOVERNMENT
PUBLICATION
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government affairs office, Abuja.
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INTERNET
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