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1.0                                                 INTRODUCTION


Revenue generation in Nigeria Local government is principally derived from tax. Meanwhile tax is completely compulsory levy imposed by government on individuals and companies for the various legitimate function of the local government (Olaoye, 2008). Tax is necessary ingredient for civilization, the history of man has shown that man has to pay tax in one form or the other, that is either in cash or in kind initially to his chieftain and on a form of organized

government (Ojo, 2003). No system or rules can be effective whether foreign or nature unless it enjoys some measures of financial independence. Local government in Nigeria has developed over a number of years. Historically, the development of direct taxation in local government in Nigeria can traced to the period before the British pre-colonial period. Under this period community taxes were levied on communities (Raibiu 2004). Recently the revenue that accrues the local government is derived from two broad sources i.e. the external sources and the internal sources. The external sources includes; the statutory allocation from the federal account in accordance, with section 160 (2) of the constitution of the federal republic of Nigeria (Promulgation) decree 1989. Statutory allocation from each state government to local government in its area of jurisdiction, Federal grants in aid, state grants-in aid borrowing from State government.

When Ekwusigo local government area was created out of Nnewi North and Ihiala local government areas of Anambra state on August 27,1996, The objective was to bring development closer to the grassroots. The people of Ekwusigo are noted for producing large quantities of cassava, cocoyam, plantain and palm oil. Towns that make up the local government are Ozubulu, Oraifite, Ichi and Ihembosi. Here are some schools in ekwusigo local government community secondary schools, Ichi boys’ secondary school, Ihembosi boys’ secondary school Ozubulu etc.


1.2 Statement Of The Problem

Over the years, revenue derived from taxes has been very low and no physical development actually took place yet the impact on the poor is not been felt.

Inadequate tax personnel, Fraudulent activities of tax collectors, Lack of understanding of the importance to pay tax by tax payers, are some of the problem of this study.



1.3 Research Questions

The following research questions will guide the study:

  1. To what extent has taxation contributed to revenue generation in Nigeria Local Government?
  2. What are the ways of improving the tax system in order to have effective revenue generation?
  3. Does lack of financial autonomy constitutes a problem to internal revenue generation?
  4. Can inadequate tax personnel affect the revenue generation in the local government?


1.4 Purpose Of The Study

The aim of this study is to identify the various ways of generating revenue in the local government. The specific objectives are;

  1. To find out if taxation has contributed in revenue in the local government
  2. To recommend the ways of improving the tax system in order to have effective revenue generation.
  3. To examine lack of financial autonomy constitutes a problem to internal revenue generation.
  4. To discover if inadequate tax personnel affect the generation of revenue in the local government


1.5 Statement of Hypothesis

Ho: Taxation has not contributed in revenue in the local government.

Hi: Taxation has contributed in revenue in the local government.

Ho: The lack of financial autonomy constitutes a problem to internal revenue generation.

Hi: The lack of financial autonomy have not constitutes a problem to internal revenue generation.


1.6 Scope Of The Study

The study will focus on the factors responsible for poor tax collection in the local government and the various ways of generating revenue in the local government. The research is intended to use primary and secondary data in order to accomplish the work.




1.7 Limitations of the Study

This study has some limitations most especially in the area of data collection which is to be covered and has time duration, financial constraints as well as time available for the completion of the study are among other factors that would limit the scope of study.


1.8 Operationalization/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.

Local government: According to Lawal 2009, local government is a political sub division of a nation in Federal system which is constituted by law and has sustained control of local affairs which include power to impose taxes or exact

labour for prescribed purpose. Finally it simply means government at the grass root.

Revenue: Public revenue could be defined as the funds generated by the government to finance its activities in order words revenue is the total fund generated by the government to meet their expenditure for fiscal year.

Generation: This is the process of sourcing revenue for the local government in carrying out their aim and objective.

Tax: It can be defined as a compulsory levy by governments on goods, service, income and wealth. It provides definite source of revenue for the government and expenditure. It is an expenditure made by the tax payer and

used by the government for the benefits of the citizens. Tax evasion means illegal reduction in ones tax liabilities thereby paying less than appropriate amount and not paying at all.


1.9 Organization of the study

 Organization of the study provides a map that contains how the study was

organized and conducted and how the chapter in the project has been sequenced /organized to achieve the research objective. So therefore chapter one of the study introduced the problem addressed in the study Chapter three presents the methodology and procedures used for data collection and analysis. Chapter four contains an analysis of the data collection and presentation of results. Chapter five offers a summary and discussion of the researchers finding implications for practice and recommendation for future research.



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