CHAPTER ONE

INTRODUCTION

1. BACKGROUND OF THE STUDY

Revenue mobilization is one of the key sources of income for all governments. Imposition of tax includes financial charge and other levies to the businesses, individuals by a government or a legal entity Ataro, et al., (2016).

“A tax is not a voluntary payment or donation but an enforced contribution exacted pursuant to legislative authority and therefore it is any contribution imposed by government” (Akrani, 2010; Ngugi, 2016). Tax may be direct or indirect. It is a pecuniary burden bored by individuals to support government functions such as development and recurrent expenditures (Ngugi, 2016).

The world economic crisis affecting United states of America and Western Europe have spilt over to Africa leading to decreased the remittances from outside Kenyan (Maina, 2013). Fluctuations in the international economies affect taxation in the developing countries. Much has been done on the world of taxation but interestingly, the world has made efforts to enhance gender equality in taxation matters.

Every government pursues economic development by trying to achieve macroeconomic objectives in a particular system of government. Various systems of government include federation, unitary, and confederation.

The Nigeria’s system favors federation. The federation of Nigeria achieves her macroeconomic objectives by performing the functions of resource allocation, income distribution/redistribution, and economic stabilization within the central government, that is, federal government and its units (states and local governments).

This system of performing government functions in different tiers of government is called fiscal federalism (Buhari, 2001; Likita, 1999). Fiscal federalism is a system of taxation and public expenditure in which revenue-raising powers and control over expenditure are vested in various levels of government within a nation, ranging from the national government to the smallest unit of local government (Anyafo, 1996). Basically, fiscal federalism emphasizes on how revenues are raised and allocated to different levels of government for development.

Public sector management has in recent time gained prominence in public-private sector discourse. The essence of this endeavour is to bring back the care principle of management in running the public sector in particular. As Ayee (2008) posits, public sector management is a body of managerial or logical thought system based on ideas borrowed from the private sector and imported into the public sector.

Ayee (2008) notes that the New Public Management (NPM) is characterized by phrases such as: reinventing, government, reengineering, revitalization of public sector service organization, transformation, total quality management, paradigm shift, result over process, downsizing and right sizing Operation of these perspectives in developing economies has come with challenges.

This will become clearer in the subsequent sections of the discourse. For this article, the political-economy theory is most valuable. The political-economy perspective to analyzing social phenomena gives primacy to the economic mode of production and relations of production as the major drivers of the entire polity, As Ake (1981) puts it, and this method gives primacy to material conditions, particularly economic factors, in the explanation of social life.

Therefore, once we understand what the material assets and constraints of the society are, how the society produces goods to meet its material needs, as the goods are distributed and what types of social relations exist from the of production, we have come a long way to understanding the culture of that society, its law, its rigorous system, its political system and even its mode of thoughts (Ake, 1981).

1. STATEMENT OF THE PROBLEM

The globally, the recognized means of funding government operations is through the levying of taxes. However, several options are open to governments as government expenditures continue to increase from year to year and the need for government to intervene in some sectors where the private sector cannot effective manage such as provision of public goods continue to arise.

Institutions charged with the responsibility for collecting revenue aren’t strengthened and more so, some political godfathers’ uses their powers to either avoid paying adequate taxes or getting their associates and allies to be under-assessed for tax payment.

Little or no conscious and sustained effort isn’t made to enhance the effectiveness of revenue collectors by the Taraba State Government. Also little or no efforts made to improve the process of assessing, the politicians, socialites, contractors, who are usually under assessed.

Finally, several research has been carried out on the effective revenue mobilization and sustainable development in Lagos State, Nigeria but not even a single research has been carried out on revenue mobilization and utilization in public sector; a case study of Wukari local government area of Taraba state, 2010-2021.

1. AIM AND OBJECTIVES OF THE STUDY

The main aim and objectives of the study is to examine revenue mobilization and utilization in public sector. Other specific objectives of the study include;

1. to determine the factors that hinders effective revenue mobilization and its effect on the utilization in the public sector.
2. to access the utilization of public sector revenue and its effect on revenue mobilization.
3. to determine the extent to which revenue mobilization and utilization influences the public sector.
4. to proffer possible solutions to the problems.
   1. RESEARCH QUESTIONS

1.     What are the factors that hinder effective revenue mobilization and its effect on the utilization in the public sector?

2.     What are the effect of public sector revenue utilization and its influence on revenue mobilization?

3.     What is the extent to which revenue mobilization and utilization influences the public sector?

4.     What are the possible solutions to the problems?

1. RESEARCH HYPOTHESIS

Ho:  Revenue mobilization and utilization has no significant effect in public sector.

Hi:   Revenue mobilization and utilization has a significant effect in public sector.

1. SIGNIFICANCE OF THE STUDY

The study on revenue mobilization and utilization in public sector will be of immense benefit to the entire Wukari local government area of Taraba state in the sense that it will encourage tax payers morale through the provision of infrastructural facilitied and other incentives to enhance its revenue generation.

It will also bring about strategies to reduce tax evasion and avoidance should be formulated by strengthen the policy framework and operational guidelines of the Taraba State internal/revenue service and adopting an evidence base government spending.

That is, government should spend tax revenue on public goods and productive ventures that will be of social and economic benefit to the tax payers. This will furthermore enhance high tax compliance. Finally, the study will contribute to the body of existing literature and knowledge to this field of study and basis for further research.

1. SCOPE OF THE STUDY

The study on revenue mobilization and utilization in public sector is limited to Wukari local government area of Taraba state.

1. LIMITATION OF THE STUDY

TIME CONSTRAINTS: One the challenges experienced by the researcher is the issue of time; the research will simultaneously engage in departmental activities like seminars and attendance to lectures. But the researcher was able to meet up with the deadline for the submission of the project.

FINANCIAL CONSTRAINTS: Every research work needs funding; however lack of adequate funds might affect the speed of the researcher in getting materials for completion of the project.

DEFINITION OF TERMS

Revenue:         A state's annual income from which public expenses are met.

Mobilization:  The action of making something movable or capable of movement.

Utilization:     The action of making practical and effective use of something.

Public Sector: The part of an economy that is controlled by the state.