Development is a sine qua non for modern civilization.
In a crusade and struggle to carry out development at all nooks and crannies of the society, the Local Government as the tier of Government that is nearest to the people is saddled with the people to a certain level.
Development is highly associated with fund, much revenue is needed to plan, execute and maintain infrastructures and facilities at the Local Government level. The needed revenue generated for such developmental projects like construction of bridges accessible roads, building of public schools, health care centres, construction of bridges among others are solely generated from taxes loyalties, haulages, fines and grants from states national and international Government.
Thus, the government cannot embark, execute and possibly carry out the maintenance of the projects and other responsibilities without adequate revenue generation. This is the basic reason why development is skeletal at some Local Government councils in Nigeria. The issue of poor revenue generation is not exceptional to Local Government in Abia State. This has been one of the problems encountered by Umuahia North Local Government.
This however pronouncedly affected development negatively in local government councils.
In this research projects, the issue is how far this poor revenue generation can affect development especially in Umuahia North local Government.
The local Government council takes direct care of the grass roots people that is the people in the rural areas. This group sometimes lack essential facilities and condition of modern civilization. They lack pipe born-water to drink, do not have electricity, accessible roads, poor educational infrastructure and facilities to mention but a few.
This is one of the major reasons of rural urban migration or movement. This has made our cities to be congested and increase in many criminal activities. Based on the above and farer going assertions. It is obvious that the impact of poor revenue on the development of the rural area is a serious problem.
This might be as a result of poor revenue generation. If Nigeria is to achieve her desired goal of vision 2020 and the Millennium Development Goals(M D G S) Target, the issue of revenue generation must addressed squarely.
Hence, the researcher is bothered to find out the impact of poor revenue generation on the lives of people at the rural area and how it has affected development in general especially in Umuahia North Local Government Area.
The main objective of the research is to evaluate the impact of poor revenue generation on the development of Local Government using Umuahia North Local Government in Abia State as a study.
Other objective of this study includes
The influence of this school has been largely the work of John Stuart Mills quoted in Noun study guide (2008) 18,especially with his work on utilitarianism, liberty and representative government, in it, he claimed that the good form of government was representative government because it promotes liberty, equity and fraternity, made men look beyond their immediate interest and recognize the just demands of other men;
Promote political education, participation and communication. Furthermore, he asserts that local government is a prime element of democracy and demonstrates the intrinsic values of democracy irrespective of the services it provides. The local government level offers the closest thing to wide spread consultation and participation.
Participation is vital to democracy since it is the community that people appreciate and tolerate each other’s views and learn the art of practical politics.
The crux of their theory is that the main purpose of local government is to provide services to the local people. Foremost among the advocates is the French scholar long wood (1953) in a National open University Study Guide (Noun) 2008 (6) who opined that democracy was the affairs of the Nation-state as a whole issue of majority rule, equality and uniformity are the norm.
He went on to say that it was equally false to see local government as a setting for political education and democracy.
To him, the local arena has only succeeded in breeding few national leaders. Local politics is more likely to reinforce narrow sectional interests than an appreciation of democracy. The citizen is more likely to learn about democracy from national politics and national issues.
Local experience and knowledge is hardly appropriate to national affairs. Sharp (1970) (4) in Noun 2008 provided a very strong case for Local Governments on the ground that it was the most effective agent for providing those services that are essentially local.
He suggested that the effective performance of these services is so compelling that if local government does not exist, something else will have to be created in its place meaning the institution is indispensable. The main functional responsibility of local Government therefore is to efficiently carry out local duties allocated to it at the highest efficiency rate.
The significance of any human endeavor is measured by its relevance to solving human problems. The finding of this study would help Umuahia North Local Government to identify the problems associated with revenue generation and its consequence on development.
The study focused on the impact of poor revenue generation and how it affects development of the Local Government areas.
It will also involve the analysis of problem associated with revenue generation and its impact on the development of Umuahia North Local Government.
The research equally encountered financial limitation as lack of sponsorship from corporate bodies, thus; the researcher little resource could not cover more areas.
The willingness of most Local Government staff to supply the needed data was another problem.
Another constraint is imposed on Local Government revenue mobilization capacity through State control over Local Government budget, which is made to pass through many levels of approval in the hands of the state government.
Even after approval, post-budget controls still impose further restrictions on what Local Government can do (Roberts, 1998).
The delay in the passage of annual budget for Local Governments poses a great problem in the sense that budget sometimes take 3 months before approval, invariably, this will cause delay in execution of Local Governments functions including payment of the staff salaries and hinders infrastructural facilities to be put in place.
In 1996, some newly elected chairmen of Local Government in Nigeria condemned in its entirety the horizontal sharing formulae of the Local Government’s allocation from the federation account which was equality (40 percent) population (30 percent), land mass/terrain (10 percent) social development factor (10 percent) and internally generated revenue (10 percent).
This formula will continue to yield less revenue for many Local Government especially when more Local Government is created.
In addition, insincerity of council staff on field assignment poses greater problem because most of them usually divert collected council fund for their personal usage thereby denying the council of the needed funds for its operation.
Some Local Governments, subventions into savings and loans companies in which the Local Governments had no account.
Some Local Governments see this as an avenue to divert councils fund for personal use.
Some concepts require proper explanation to enhance our understanding of the time where necessary opinion of scholars will be cited to explain the terms; the researcher will also give some fundamental definitions of terms.
Local Government: Local Government could be defined as the third tier level of Government created for the purpose of efficient and effective administration of the Localities. It is political subdivisions of a nation in federal system which is constituted by law and has substantial control of Local affairs which includes the power to impose taxes or exact labour for prescribed purpose.
Revenue: public revenue could be defined as the funds generated by the government to finance its activities. In other words, revenue is the total funds generated by government (federal, State, Local Government) to meet their expenditure for a fiscal year.
This refers also to the grand total of money of income received from the source of which expenses are incurred. Revenue could be internal or external revenue.
Generation: This is the process of sourcing revenue for the Local Government in carrying out their objectives and aim.
Expenditure: Public expenditure refers to the expenses which the Government incurs for its own maintenance in the interest of the society and the economy in order to help other countries.
Tax: Tax can be defined as a compulsory levy by government on goods, services and income/wealth. It provides definite source of revenue for Government expenditure. (Udeh O.S 2008). It is the way by which Government obtain extra money. It is a payment made by tax payers and used by the Government for the benefits of all the citizens. Tax could be direct or indirect tax.
Tax evasion: Tax evasion means illegal reduction in one’s tax liabilities, thereby paying less than the appropriate amount and not paying at all.
Tax avoidance: Tax avoidance is the act of stream lining ones financial affairs with the law so as to minimize the tax liabilities.
Development: development is that the process by which people creates and recreates themselves and their life circumstances to realize higher levels of civilization in accordance with their own choice and levels. It is also a type of social change in which new ideas are introduced into a society in order to produce higher per-capital income and levels of living through more modern production methods and improved social organization.