1.1 BACKGROUND OF THE STUDY
The socio economic and political well beings of individual in the society are the responsibilities of government for any government to achieve this aim effectively, there is need for such a government to decentralize its administrative system on this: federal government state government and local government different taxes are assigned to different levels,
The local government has been change with the administrative and development responsibilities of the grassroots level; while valuable literature and practice has developed over the years on these issue according to Framecinwa (2001) local government is define (in a democracy) as a government of the local people (community) by the local materials and resources e.g taxes, rates, donations, grant from federal government e.tc for the benefit of those leaving in a particular local area from this defination one can deduce that a government authority was local materials and reource to finance its projects. These local material and resource include the various from of taxes available to the local government authority. Because of the peculiarity of the local government authority to the welfare of the people at the grass roots, that is only some functions are delegated to the local government in order to enhance distribution to local resources for rapid growth and development some of the function include: establishment and maintenance of markets, motor park and public convenience e.t.c
Oyebanji (2005), defines taxation as a compulsory levy by the government of any country through and appreciate agency, on all incomes, good services and property of an individuals partnership, executor trustee and corporate body. It can also be define as a compulsory payment imposed by individual with uniform economic frontiers for legitimate functions for various legitimate function of the state.
Government imposes taxes on its citizens to enable it obtain the required tax revenue to finance its activities, such as payment for public service and other social responsibilities, once it is levied on the tax payers, they must pay it and if anyone should default, there are some tax offenders. Taxes are not imposed purposely for contering upon; rather a tax payer has special benefit for providing the local government with fund necessary for general administration of the country.
Rather than the tax payers paying promptly the taxes variously due on them, most of them engage in tax evasion which consequently learning about a drastic fall in the tax revenue generated the local government and this invariable has some adverse economic implication in the financing and administration of the local government.
Evasion (illegal methods of reducing ones tax liability, this posse a great threat and effects development these ugly trends, the authority of local government must be prepared to fight the massive tax evasion among he indigenes.
1.2 STATEMENT OF THE RESEARCH PROBLEM
There is nothing that has merit that will not have demerit. As a result of this, efficient tax collection has effects in local government. The no payment of tax revenue to local government (i.e revenue due to a tax payer) was a significant implication in both the people of the local government in question terms of development and also hinders the local government authority in carrying out its responsibilities. In every local government, a very small amount is collected as taxes.
It is therefore, obvious that in most local government, people are just evasion without knowing the implications. The tax payers are not conscious of their duties and obligations by evading taxes some of them believed that they are paying the money for nothing or to one particular person (i.e either the tax collectors to the local government chairman). No there are many derivatives benefits. These people are not award of the benefits they will derive from pay tax. The money (revenue) realized from the taxes is being using to provide social and basic amenities general administration and to stimulate growth and development of the local government.
1.3 OBJECTIVES OF THE STUDY
The objective to achieve at the end of this study include primary and secondary objective viz: the primary objectives evaluate the relationship between literature and practice of tax revenue in local government of Nigeria and to determine various ways of improving the efficient and effective means of tax revenue collection due to the local government.
The secondary objectives are as follows:
To identify the various taxes sources that are available to the local government authority to identify those one usually collected by the local government authority
To examine the importance of tax revenue according to the local government authority.
To ascertain the financial implication on the current situation
To make recommendation from the funding realized in the course of carrying out the project work.
1.4 SIGNIFICAN OF THE STUDY
The essence of this research work is to evaluate relationship between literature and practice of the revenue in Isin local government area of Kwara state and to identify the various types of taxed and levies being collected by the local government. Although, various researchers had been carried out in the past to uncover the various problems encountered by the local government in terms of problem associated with efficient collection of tax revenue, tax evasion as well as tax avoidance by the local people (tax payers) which has significant effect on the local government. It is hope carryout the research the aforementioned problems identify by the last researcher and to explore every avenue on how to sensitize or enlighten the tax payers at the grassroots on the importance of tax revenue an how to ensure prompts collection as well as to make recommendation from the finding realized in the course of carrying out the project work that will be assistance to both present and future chairman and to staff especially tax collectors and officers to Isin local government authority and other authorities throughout the federation.
1.5 RESEARCH QUESTION
In other to provide solution to the research problem identified to achieve the purpose of this study; the following research hypothesis are formulated:
H0: Null hypothesis
H1: Alternative hypothesis
i. H0: There is no significant relationship between literature and practice as regard tax revenue to local government of Nigeria.
H1: There is no significant relationship between literature and practice as regard tax revenue to local government of Nigeria
ii. H0: Tax avoidance constitutes constraint to the proper collection of tax revenue acruning to the local government
H1: Tax avoidance constitutes constraint to the prompt collection of tax revenue accruing to the local government.
1.6 SCOPE OF THE STUDY
The research work is focused on local government administration in terms of relationship between literature and practice tax revenue as an important source of local government income.
Furthermore, this research is focused principally on the office of the chairman of the local government (Isin), the finance department, the tax revenue collectors department the civil servant, the market woman and men and other people between year 1999 -2005.
1.7 LIMITATION OF THE STUDY
The researchers were faced with some constraints the chief among them is time constraint. The time scheduled for the national economy. Another problem that was encountered was financial constraints. Researchers were faced with serious financial constraints due to the huge amount involved to get the primary data hence, eventually resulted inadequacy of the primary data.
Also there was reluctance from the tax officials to part with their taxed and other revenue data. Lastly the response rate of the questionnaire that was the response rate of the questionnaire that was administrated to the local government staff more so, it is fundamental to state clearly here that whatever suggestion that come up as a result of this research work is expected to be used by the local government that deals and provides services to the rural dwellers who are majority of the nation’s populace.