Towards effective internal revenue mobilization by District Assemblies for local development: A case for Bolgatanga Municipal Assembly

The Bolgatanga Municipal Assembly by the legislative instrument of the constitution of Ghana and the Local Government Act,1993 (Act 465) makes provision for the assembly to be financially sound by mobilizing fund internally through the Internal Generated Fund (IGF) to complement the external grants to undertake development activities in its area of jurisdiction. However, many districts including the Bolgatanga Municipal Assembly are faced with a number of problems in relying on its IGF for development. The purpose of the study is to examine the ways towards effective and adequate mobilization of IGF by the Bolgatanga Municipal Assembly, which is the case for the study. In carrying out the study to address the challenges and problems of IGF in the assembly, 122 tax payers and 33 revenue collectors were the respondents for the study. Also included in the respondents is the Deputy Municipal Finance Officer, who was purposively selected to respond to the questions, raised in the questionnaires. The revenue collectors were stratified into commission earners and permanent collectors of the assembly of which 10 permanent staff and 23 commission earners were selected for the study. Each of these respondents was randomly selected from a list of revenue collectors and properties owners provided by the assembly. The study collected both qualitative and quantitative data for the analysis. The quantitative data were analyzed using the 17th version of Statistical Package for Social Science (SPSS), while the qualitative data from the respondents were analysed by making comprehensive statements from the responses. The findings from the study revealed that the Municipality’s IGF is weak as it could only finance 12 percent of its total expenditure for the period 2007 to 2011. It has also experienced a decline in growth from 102 to -18 percent in 2007 to 2011 respectively. The major sources of revenue of the IGF component to the assembly came from rates as it has contributed on average 44 percent to total IGF of the assembly. The assembly has not been able to mobilize the IGF adequately due to political interference in the collection of the IGF as sometimes the political head of the municipality sometimes intervene in the assembly efforts to mobilize revenue. Other factors accounting for the low performance of the IGF of the assembly are low calibres of revenue collectors recruited as about 80 percent of them could not meet the basic qualification of revenue collectors. Some of the collectors were also dishonest and there iv was high level of corruption perception in the revenue collection efforts as well as the fact that the collectors complained of low remuneration, which affects their moral. The recommendations made in order to enhance the IGF base of the Assembly include, the need for capacity building programmes for the revenue collectors, widening the revenue base of the assembly as well as increasing it efforts towards tax payers education. The author recommends that, the assembly should leave the revenue collection efforts to private sector by providing them with the guidelines for them to operate.

Source: KNUST