The Impact of Poor Revenue Generation on the Development of Local Government Areas. (a Case Study of Afikpo North Local Government)
CHAPTER ONE
INTRODUCTION
1.1 BACKGROUND OF 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 third 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 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 Ebonyi State. This has been one of the problems uncounted by Afikpo North Local 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 Afikpo North local government.
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- STATEMENT OF THE PROBLEM
The local government council takes direct care of the grassroot people, that is the people in the rural areas. This group of people sometimes lacks 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 few. This is one of the major reasons of rural-urban migration of movement. This has made our cities to congested and increase in many criminal activities. Based on the above and foregoing assertions, it is obvious 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) targets, the issues 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 Afikpo North Local 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 Afikpo North in Ebonyi State. The other objective of the study includes:
- To determine the level of modern social amenities available in Afikpo North.
- To find out the level of poverty association with the rural people as a result of poor development.
- To find out the degree of rural-urban migration.
- To make useful suggestion to solve the problem of poor revenue generation as development depends on revenue generated.
1.4 RESEARCH QUESTIONS
- What is revenue generation?
- To what extent has poor revenue generation affected the development of Afikpo North L.G.A?
- What are the problems militating against effective revenue generation in the local government system?
- How can revenue generation in Afikpo North Local government be improved?
1.5 SIGNIFICANCE OF THE STUDY
The significance of any human endeavor is measured by its relevance to solving human problems. The findings of this study would help Afikpo North Local government to identify the problems associated with revenue generation and its consequences on development
- The study will give authoritative information to local government on how to tackle the issues that may rise on revenue generation.
- Again, the study also sense as a tool for most local government areas to a speedy setup of some of some strategies which will enable them to generate their revenue easily.
- It therefore gives potential market men and women as well as other residence of various local government council as regards payment of taxes, rates and charges.
- The study also enables the researcher to have an in-depth knowledge of the study.
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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 with revenue generation and its impact on the development of Afikpo North Local Government.
1.7 DEFINITION OF TERMS
Some concepts require proper explanation to enhance our understanding of the theme where necessary opinion of scholar 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 is federal system which is constituted by law and has substantial control of local affairs which includes the power to impose taxes or exact labour for prescribed purpose.
According to Willian 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.
- PUBLIC REVENUE
Public revenue could be defined as the funds generated by government to finance its activities.
In other words, public revenue 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 or income, received from the source of which expenses are incurred. Revenue could be internal or external revenue.
- PUBLIC EXPENDITURE
Public experience 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, service, 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 tax payer 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 is also a type of social change in which new ideas are introduced into a social in order to produce higher per-capital income and levels of living through more modern production methods and improved social organization.
- REVENUE GENERATION
This is the process of sourcing revenue for the local government in carrying out their aim and objectives.
- LOANS
Loans can be described as a financial aid with interest payable. Sometimes local government borrow money in form of loan from other bodies like Banks, State government, Federal etc to enable them execute their projects when they are in short of fund. However, this loans is payable at a given interest rate over a specified period of time.
- RENT AND ROYALTY
These are payments made to local government properties or revenue such as land, building e.t.c
