APPRAISAL OF TAX ADMINISTRATION ON REVENUE GENERATION OF GOVERNMENT IN OYO STATE-NIGERIA

Abstract

Government revenue is an important tool of fiscal policy of the government in generating funds and resources that are used to facilitate and enhance economic growth and development. The over-reliance of Oyo State Government on Monthly Statutory Federal allocation necessitated the need for the study to appraise the efforts of tax administration on widening the state revenue tax base. Hence, this study appraised the impact of tax administration on revenue generation of government in Oyo state, Nigeria. Specifically, it identified the challenges facing tax administration in Oyo state and assessed the effect of tax components (Personal Income Tax- PIT, Withholding Tax- WHT and Capital Gain Tax- CGT) on the state internally generated revenue.

The study population was 144 staff members of Board of Internal Revenue Service (BIRS) of Oyo State while the sample size was 38 (senior/managerial staff) based on purposive sampling technique. Primary data was collected using structured questionnaire while secondary data was extracted from Oyo State BIR Record and Nigeria Bureau of Statistics. Both descriptive and inferential statistical tools were used for the study. The descriptive statistical tools employed were percentages, frequency counts and bar chart while the inferential statistical tool employed was multiple regression analysis.

The result revealed that challenges facing tax administration in Oyo State were: lack of modern technology application(100%), lack of taxpayers’ confidence in the state government(91.43%), inadequate resources for tax authorities(91.43%), irregular training and re-training of tax personnel(91.43%), tax personnel in the state are poorly remunerated(85.72%) and poor data management of tax payers’ records(77.15%). The multiple regression model with all four predictors produced R² = 0.9815, F (4, 5) =66.35, p<0.0002 which implied that the overall regression was statistically significant and reveals the joint effects of PIT (PAYE and DA), WHT and CGT on Oyo state internally generated revenue was 96.7%. Therefore, PIT (PAYE and DA), WHT and CGT do have positive and significant effects on internally generated revenue in Oyo State.

The study concluded that the major challenges facing tax administration in Oyo State were lack of modern technology in use, lack of taxpayers’ confidence in the state government, inadequate resources for tax authorities and irregular training and re-training of tax personnel. Also, the tax components: PAYE and DA have positive effect on the state internally generated revenue. It was therefore recommended that the state government should organize regular training and re-training of tax personnel, remunerate tax official adequately, update records of tax payers using modern technological device and pay more attention to Withholding Tax Payment, encouraging and ensuring good coverage of remittance.