The Impact of Revenue Consultants on States’ Internally Generated Revenue; Evidence from Oyo State in South West, Nigeria

Revenue generation in Nigeria has been one of the topical issues in recent times, especially with the drastic and phenomenal shift from agriculture to crude oil exportation. The occasional decrease in the price of crude oil and various predictions of the running out of oil wells in Nigeria shortly have rekindled the government’s interest in agricultural and other non-oil sources to the country and its constituent states. The emphasis has always been on boosting internally generated revenues to reduce reliance on oil and other statutory allocations to states and the third tier of government. This study investigated “The impact of Revenue Consultants on States Internally Generated Revenue (IGR); Evidence from Oyo State, Nigeria”. The study has been carried out to justify or otherwise, the employment of Revenue consultants by state governments in Nigeria. The study also investigated whether the engagement of revenue consultants has increased the IGR in Oyo State, it also evaluated the effects of tax evasion and activities of corrupt tax officials on revenue generation of Oyo State and also developed strategies for eradicating tax evasion and checkmate uncivil behavior of some tax officials in Oyo State. The study adopted both survey techniques, using a questionnaire (designed for senior and strategic officers of four special ministries of government, i.e. Board of Internal Revenue, Ministry of Finance, Auditor and Accountant General, in one hand and purposive sampling technique was employed to distribute the questionnaires, which were later collected, collated and analyzed using simple descriptive statistical technique of tables, frequency count and percentages. Oyo state government engaged the services of revenue consultants in the year 2012, therefore, an independent sample T-test was used to analyze the monthly internally generated revenue for five years, 2010 to 2014; where monthly IGR for the years 2010 and 2011 represented the years when revenue consultants were not engaged by Oyo state government, while the year 2012-2014 represented the period’s revenue consultants were engaged. Upon the collation, the independent sample T-test was used as an analytical tool for the variables. The year 2010 and 2011 (i.e. 24 months) were treated as a separate group, while the year 2012-2014 (i.e. 36 months) were treated as another group. The T-test revealed that at 95% confidence level, there is a significant difference between the mean of the two periods observed. This implies that the revenue of Oyo state during the period of the engagement of revenue consultants as compared to the period before the engagement of revenue consultants has significantly improved. Furthermore, the study revealed that tax evasion has a significant impact on the state’s Internally Generated Revenue (IGR).