Measures that can be taken to increase local government revenue in Ghana, Nigeria, and other West African countries include improved revenue collection procedures, public education, recruitment of qualified staff, effective supervision of revenue collectors, enhanced enforcement, better conditions of service of local government tax collectors and establishment of business ventures for profit.
Are you looking for ways by which the revenue base of the local governments in your country can be improved?
Maybe you’re a WAEC/WASSCE General Arts candidate or a JAMB/NECO student getting ready to write your Government paper.
And something keeps telling you that a question on how to increase local government revenue is likely to be there on your Government question paper.
WAEC Government Past Question
The truth is you’re right. The question below is one of those WAEC government questions that are repeated frequently.
OUTLINE ANY SIX WAYS BY WHICH THE REVENUE BASE OF A LOCAL GOVERNMENTS CAN BE IMPROVED.
So you see? You’ve made the right decision to come here. This tutorial promises to help you identify the various measures that will increase local government revenue.
You can now go ahead and note the best steps to take to increase local government revenue in any West African country.
Please note that the same points are equally good for improving the revenue base of most local governments in developing countries worldwide.
1. Improved Revenue Collection Procedures
One key measure the government must take to increase local government revenue today is to modernize all revenue collection procedures.
Examples are indexing of property values, e-bill delivery, and the introduction of e-payment gateways.
These modernized methods of local government revenue mobilization will result in inefficiency and increased revenue in the sector.
2. Improved Enforcement
Secondly, District Assemblies, state governments, and local councils must strictly enforce the rules regarding payment of levies, fees, and royalties.
In addition, the law must deal with persons who flout the rules without cause.
An improvement in the enforcement of revenue collection rules and regulations will serve as a deterrent to those who willfully evade local government taxes.
3. Public Education
Local governments can increase their revenue by showing the public why it is necessary to pay their taxes and other local government levies.
When people see themselves as part of local government and beneficiaries of development projects, they will be more than willing to pay their levies promptly.
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4. Improved Accountability
Closely linked to the need for public education is the importance of accountability from local government officials. To increase local government revenue, district assembly officials must engage the local people in honest discourse.
They must hold regular meetings with the public and explain to them how they spend their tax monies. This will build transparency and trust between the two parties.
The resulting effect from the improved relationship between the two parties is that persons who are eligible to pay levies will find the motivation to do so.
5. Increased Central Government Grants
The central government needs to increase the grants allocated to every local government. A certain percentage of the total government revenue is allocated to the District Assemblies for development purposes in Ghana.
We call it the District Assemblies Common Fund.
In order to increase the volume of local government revenue, the central government must regularly increase the size of the Common Fund.
6. Recruitment of Qualified Personnel
It is only when those who shoulder the responsibility for bringing more funds to local government coffers know what they are about that the revenue targets can be easily achieved.
This is why effective recruitment interviews that are above board are necessary. In all cases, meritocracy rather than favouritism and nepotism should be the guiding principle.
7. In-Service Training
Another way to increase local government revenue is to organize regular refresher courses for tax collection officials. Because the more knowledgeable and skilled they are, the higher their efficiency level will become.
8. Establishment of Businesses
Local authorities should engage in profitable business ventures to augment the funds coming from taxes, levies, fines, licenses, and royalties. They should explore opportunities in such income-generating activities as investing in the hospitality industry, transportation, and agriculture.
9. Reduction in Corruption
The authorities must sanction corrupt revenue collectors as speedily as possible. This would serve as a deterrent to others.
Again, when local government officials are employed on merit (that is, without taking large sums of money as bribes from unqualified ones), the tendency to embezzle funds, for example, will reduce.
10. Making of the Payment of Levies Convenient
Early on, I referred to the introduction of e-payment methods as a means to improve the revenue base of local government authorities. Electronic payment systems such as MTN Mobile Money, Vodafone Cash, and M-Pesa will help improve revenue mobilization.
Also, district assemblies must endeavour to collect fees at the time most convenient to the majority of payers.
For example, it is best to effect payment of royalties for the use of farmlands during the harvesting season.
11. Effective Financial Control
The central government must be proactive in controlling the finances of local governments as provided for in the law.
It is an open secret that much of the revenue collected find their way into private pockets.
For that matter, there should be constant internal and external auditing of the accounts of the local governments. The purpose is to prevent misappropriation and embezzlement of local government funds.
12. Improved Service Conditions
Revenue collectors should be given adequate salaries and other incentives. Not only will this motivate them to improve upon their revenue collection but also, it will discourage them from indulging in corrupt practices that go to undermine the revenue base of the local governments.
Conclusion
The above are some of the most effective measures that can increase local government revenue in Ghana, Nigeria, Sierra Leone, and the rest of West Africa.
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