IMPACT OF TAXATION ON THE DEVELOPMENT OF NIGERIAN LOCAL GOVERNMENTS: A STUDY OF OSISIOMA NGWA LOCAL GOVERNMENT AREA OF ABIA STATE

Abstract

The study was on the impact of taxation on the development of Nigerian local governments: A study of Osisioma Ngwa Local Government Area of Abia state. The broad objective of the study was to investigate the impact of taxation on the development of Nigerian local governments. The study was guided by three specific objectives which included the evaluation of the contribution of taxation to the internal revenue generation of local governments in Nigeria; examination of the extent over dependence on statutory allocation affects tax collection by the local governments in Nigeria; and determination of the impact of official corruption on tax collection by the local governments in Nigeria. The study was theoretical, hence the ex-post-facto research design was employed. Secondary sources of data were used through the review of theoretical and empirical literature relevant to the study. The study adopted Ibn Khaldun's theory of taxation as theoretical framework of analysis. The findings clearly indicate that revenue derived from taxes in the local governments was very low, owing to state government encroachment on or complete takeover of the little viable areas meant for local governments in their domain, fraudulent activities of tax collectors, among others. A major implication of the findings is that these local governments experience low internal revenue generation through taxation resulting to low execution of development projects. The study therefore recommended, among others, that the Federal and State governments should give adequate tax powers to local governments and stop encroaching on the little viable areas meant for local governments.