Excerpt
TABLE OF CONTENTS
LIST OF TABLES v
LIST OF FIGURES vi
LIST OF ABBREVIATIONS ix
OPERATIONAL DEFINATION OF TERMS x
CHAPTER ONE 1
INTRODUCTION 1
1.0 Introduction 1
1.1Background of the study 1
1.2 Problem Statement of the Study 4
1.3 General Objective of the study 4
1.4 Specific Objectives of the study 4
1.5 Research Questions 5
1.6 Scope of the study 5
1.6.1 Time Scope 5
1.7 Conceptual frame work for the Study 6
1.8 Significance of the study 7
CHAPTER TWO 8
LITERATURE REVIEW 8
2.0 Introduction 8
2.1 Service Delivery in Local Governments. 8
2.2 Decentralization 10
2.3 Local Revenue Collection 11
2.4 Tax administration 12
2.5 Revenue Collection and tax Management 12
2.6 Relationship between tax management and service delivery in local government 13
2.7 Summary of Literature Review 15
RESEARCH METHODOLOGY 17
3.0 Introduction 17
3.1 Research Design 17
3.2 Study site and Setting 17
3.3 Study Population 17
3.4 Sample size and selection of participants 17
3.5.1 Purposive sampling technique 18
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3.5.2 Simple random technique 19
3.6 Eligibility Criteria 19
3.6.1 Inclusion criteria 19
3.6.2 Exclusion criteria 19
3.7 Data Sources 19
3.8 Data Collection Instrument 19
3.9 Data Collection Methods 19
3.9.1 Observation Methods 19
3.9.2 Interview method 20
3.9.3 Questionnaires 20
3.9.4 Documentary method 20
3.10 Data Processing, Analysis and Presentation 20
3.10.1 Data Analysis 21
3.10.2 Data Presentation 21
3.11 Measurement of variables 22
3.12 Quality Control (Validity and Reliability) 22
3.13 Data management 22
3.14 Limitations to the study 23
3.15 Ethical Consideration 23
Approval 23
Consent 23
Privacy 24
CHAPTER FOUR 25
PRESENTATION, ANAYLSIS AND INTEPRETATION OF RESULTS 25
4.0 Introduction 25
4.1 Response rate 25
4.2 Bio-data of Bala Sub-county respondents 25
4.2.1 Age category of respondents 25
4.2.2 Gender of the respondents 25
4.2.3 Level of education of the respondents 26
4.2.4 Respondents involvement in tax management 26
4.2.5 Does BSC provide services to the local community 27
4.3 Impacts of tax management in BSC 27
4.3.1 Correlation results for tax management and service delivery 28
4.3.2 Regression results for tax management and service delivery 29
4.4 Implementing tax management and tax ssources in BSC 29
4.4.1 Correlation results for implementing tax management plan and service delivery 30
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4.4.2 Regression results for implementation of the tax management plan and service delivery 31
CHAPTER FIVE 32
SUMMARY, DISCUSSION, CONCLUSION AND RECOMMENDATIONS 32
5.0 Introduction 32
5.1 Summary of the study 32
5.1.1 Impacts of tax management on service delivery in BSC 32
5.1.2 Implementing tax management and tax sources in BSC 32
5.2 Discussion of the study 32
5.2.1 Impacts of tax management on service delivery in BSC 32
5.2.2 Implementing tax management and tax sources in BSC 33
5.3 Conclusions of the study 34
5.3.1 Impacts of tax management on service delivery in BSC 34
5.4 Recommendations of the study 35
5.4.1 Impacts of tax management on service delivery in BSC 35
5.4.2 Implementing tax management and sources in BSC 35
5.5 Limitations of the study 35
5.6 Areas for further study 36
REFERENCES 37
APPENDICES 39
APPENDIX I 39
CONSENT FORM FOR THE RESPONDENTS 39
APPENDIX II 40
QUESTIONNAIRES 40
APPENDIX III 44
KEY-INFORMANT INTERVIEW QUIDE 44
APPENDIX IV: TIME FRAME FOR THE STUDY 46
APPENDIX V 47
PROPOSED BUDGET FOR THE STUDY 47
APPENDIX VII 48
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LIST OF TABLES
Table 1: Showing Sample size and sampling procedures for the study 18
Table 2:The Age category of BTC respondents 25
Table 3: Gender of the respondents 26
Table 4: Education level of the BSC respondents 26
Table 5: Service delivery to the Local community 27
Table 6: Statements about impacts of tax management. 28
Table 7: Correlation results for tax management 29
Table 8: Regression results for tax management 29
Table 9: Statements about tax sources 29
Table 10: Correlation results for implementation of tax management 30
Table 11: Showing the proposed time frame within which the study will be conducted 46
Table 12: Proposed budget for the study 47
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LIST OF FIGURES
Figure 1: Conceptual frame work for the study 6
Figure 2: Involvement in the management of tax 27
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LIST OF ABBREVIATIONS
CTL:
Commercial transaction levy
KDLG:
Kole district local government
LGA:
Local Government Act
PAYE:
Pays as you earn
SC
Sub county
SDI:
Service delivery indicators
USPS:
United States post services
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OPERATIONAL DEFINATION OF TERMS
Taxation -refers tomposition of compulsory levies on individuals or entities by governments
Services delivery-According to this study, services delivery refers to provision of free services to the public such as free health care services, bulding of schools, free education and good road network to the community
Decentralization- According to the reaseracher, decentralization refers to the transfer of power and authority from central Government to the Local Government.
Tax-refers toa compulsory contribution to state revenue, levied by the government on workers' income and business profits, or added to the cost of some goods, services, and transactions
Revenue -refers toa state's annual income from which public expenses are met.
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CHAPTER ONE
INTRODUCTION
1. 0 Introduction
In this chapter, the researcher presents the background of the study, statement of the problem, purpose of the study, objectives of the study, research questions, scope of the study, conceptual frame work and the significances of the study.
1. 1Background of the study
The provision of public services by the government, through the process of decentralization is a necessity for community development. Tax Management deals with filing of Return in time, getting the accounts audited, deducting tax at source etc. Elements of the tax management include, filing return, auditing, and source deduction (BYJU’S CLASS)
Tax management helps the tax manager to be responsible for keeping businesses in line with various government tax laws which includes local, state, and federal tax regulations. They use measures and improve policies for handling various areas that involve taxes. Tax Managers are also responsible for performing estimations, assessing, planning, and research and supervise audits. A company tax manager’s primary role is designing, applying and supervising the tax plan for the company(Bird, 2010).
The Ministry of Local Government (MOLG), is a cabinet-level government ministry of Uganda. It is responsible for the "creation, supervision and guidance of sustainable, efficient and effective service delivery in the decentralized system of governance. The ministry is responsible for the harmonization and support of all local government functions, to cause positive socio-economic transformation of Uganda".(LGA, 2016).In addition to that, Local Government were given the mandate to raise their own revenue to finance their activities (LGA, 1997). Local Revenue collection refers to the procedures put in place by different Local Government agencies in collecting all assessed revenue as pre-determined in the budgets and work plans on due dates(MDLG, 2017).
Local Revenue Collection involves, the management of tax laws, rules and regulations promulgated by the Local Government on behalf of the state (Zaake et..al, 1998). The major sources of local revenues include; Parking fees, Market dues, Land fees, trading licenses, inspections and plan fees, registration fees, water revenue, taxes on specific services, Local Service Tax (LST), Local Hotel Tax (LHT), Operational permits and many others as the sources sof revenue to the government(Kleven, et al., 2011).
On the other hand, service delivery is an arrangement under which there is a periodical performance of supplying public goods to the public in which the public access them and utilize them freely. In addition to that, Service delivery refers to a system of implementing a given project or service in a way that is satisfactory in the eyes of the public(Best, et al., 2015). The LGA, (1997), defines local revenues as the
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sub total of all categories of revenue collected from number of sources like Market dues, fines, and penalties, parking fees.
Therefore, service delivery refers to the provision of standardised service by the government to all people especially those that cannot be provided by the private sector such as Road construction, Building of the Health Centres, free health care services, provision of safe and clean water, provision of free education under UPE and USE to the Vulnerable population ,Building Hospitals and bulding of Schools, (Birungi and Mutenyo, 2000).
However, in Uganda, the government decentralized power and authority to the Local government to guide districts and even sub counties to plan for revenue enhancement in accordance to the laws. Under this system, local governments are obliged to mobilize adequate revenue to fully execute their mandate in service delivery. This is because a sound revenue system for local governments is an essential precondition for the success of fiscaldecentralization. In addition to raising revenues, local revenue mobilization has the potential to foster political and administrative accountability by empowering communities (Best, et al., 2015). The basic community services include access to clean water; public lightingsystems; safe sanitation services; health services; education; feeder roads;drainage channels; garbage collection and many other sanitation systems
Decentralization in Uganda started in 1993/1994 with the main objectives of building a more democratic Government that is responsible and accountable to the public to promote capacity building at local ownership, (Langseth et..al 1996). In conformity to the Local Government, (Resistance Councils) statute No_ 15 of section 44 of 1993, the constitution of the Republic of Uganda provided a decentralization system of governance with the districts at the top of the administrative units. They are governed by the constitution of 1995 of the Republic of Uganda (Bray, 2008).
However, it is the responsibility of the governments to render services to its citizens. Such services include; provision of security, infrastructural facilities, health care services education among others”. For the government to provide these services, it needs adequate resource allocation, revenue management, expenditure management, budget and budgetary control, internal and external audit and other components of public sector, financial management that will assist achieve greater efficiency(Venables, 2010).
However, many Local Governments are unable to delivers services to the residents despite of the continues revenue collection in the districts and the sub-counties from various revenue collection points. This might be due to improper financial management, rampant corruptions , failure to collect the revenue effectively, conflicts of interest among the political leaders and the government workers hence creating hug gap in the financial managements which on the other hand little or no services deliver to the community(Best, et al., 2015).
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Local Government Act of 1997 gives mandate to Local Government to collect revenues from their own sources such as property tax, licences, permits, fines and penalties, Market dues, parking fees and take financial decisions while complying with financial and accounting regulations 1998 guidelines of the financial operations and specifies decentralization policies, rules and regulations, Local Government were empowered to carry out proper planning decision at budget level, do complete enumeration and assessment of taxes for financial decentralization to succeed in improving Local Revenue Collection(MDLG, 2017).
Though only 1.06 trillion shillings is allocated to local government sector, the entire decentralization process is expected to be allocated a total of 3.5 trillion as per the Budget Frame Work Paper 2020/21 which has been debated and passed by the 10th Parliament in accordance with the 2015 Public Finance Management Provision. The worrying bit about the allocations to the local governments is that most of their budget is meant for recurrent expenditure in wage payment not actually service delivery. This is exemplified by the fact that 2.883 trillion of 3.5 trillion is meant to cover recurrent budget while only 688 billion is the development budget (Kaziba et..al, 2017).
Despite of the facts that, the Government is supposed to provide free services to the general population such as the good roads, free health care services, bulding of schools, bulding of health facilities and free education but there are still warries about the allocation of those revenue collection as indicated by poor road networks in the region, shortages of drugs in the health facilities, poor infracstructure in the Government aided schools and Institution and reduced government scholarships in the country. Therefore , this study aimed at investigating the tax management and sevices delivery to the community in Kole district hence providing deeper contextual understanding of tax management and services delivery in Kole district.
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1.2 Problem Statement of the Study
There is a lot of scandal in the public sector in Uganda and dwindling levels of aid as far as tax management and service delivery is concerned. The provision of public services by the government, through the process of decentralization is a necessity for community development. Reports show that during the last quarter under review, the department received UGX 236.430 million (21%) of it planned annual kole district budget of UGX 1.143 billion. Out of the quarterly planned revenue of UGX 285.487 million, only UGX 236.430 million was realized. This represented 83% revenue performance. The shortfall of 17% was an effect of decentralized salary processing which made staffs that were planned under the department paid under their respective cost centers. Quarterly performance of Locally Raised Revenue and District Unconditional Grant non-wage were in excess by 111% and 39% respectively. This is to be used for co~funding on capital projects, monitoring of all the programs and the general supervision of constructing latrines, classrooms and health centre’s and opening of community roads to ensure better standards so as to meet the desired services (Manor, 1998).
But despite of all that, the level of service delivery in Kole District local government remains poor as evidenced by high maternal deaths, high poverty levels, the poor hygiene of the communities, poor sewerage system, dumping sites, water source, and street lights that all turned out to be nonexistent or below standards. However, the situation has not improved and this may be because of poor management of the low level of revenue collected. This could lead to poor health services to the citizens, insecurity, poor educational services among others (Manor, 1998). Many studies in Africa and Uganda have cited that poor staff motivation, corruption, gossip, nepotism, the laissez-faire style of administration, poor accountability, and political interference, lack of coordination, staff absenteeism, and role conflict as some of the challenges affecting service delivery but it is not clear is these apply to Kole district.
The government and other partners have tried to make civil services providers at all levels motivated, and efficient through capacity building of staff in order to deliver quality services to its citizens but the problem is not yet addressed and is likely to undermine the autonomy of the Local Government. It is therefore against this background that the current study intends to find out how tax management is affecting service delivery in Local Government in Bala Sub County, Kole District Local Government.
1.3 General Objective of the study
To examine the effects of tax management on service delivery in Local Governments of Uganda to the community in Bala Sub County, Kole District Local Government.
1.4 Specific Objectives of the study
The researcher was guided by the following research objectives;
I. To identify the different common tax management activities in Bala Sub County, Kole District Local Government.
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II. To assess the effects of tax management on service delivery in Bala Sub County, Kole District Local Government.
III. To examine the relationship between tax management and service delivery in Bala Sub County, Kole District Local Government.
1.5 Research Questions
I. What are the different common tax management activities in Bala Sub County, Kole District Local Government?
II. How does tax management activities affect service delivery in Bala Sub County, Kole District Local Government?
III. What is the relationship between tax management and iservice delivery in Bala Sub County, Kole District Local Government?
1.6 Scope of the study
The research was conducted in Bala Sub County, Kole District Local Government; justification for the choice of Bala Sub County, Kole District was easy access to information, geographical spread and availability of audit of final accounts for most of its lower local government for the period under review.
1.6.1 Time Scope
The study identified the periods between 2017 to 2020 for data and information colection. But the actual study period was from Jan 2021 to September 2021. During 2017 to 2020, Kole district was not financially stable due to issues of corruption and diversion of the allocated funds budgeted for different activities.
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1.7 Conceptual frame work for the Study.
Dependent Varibles
Abbildung in dieser Leseprobe nicht enthalten
Figure 1: Conceptual frame work for the study
Narratives of the Conceptual frame work.
From the illustration above, the study was based on two variables, the independent variable was tax management measured by collections enforcement, audits and investigations, returns processing and payment and tax payers’ services and education and on the other hand the dependent variable was service delivery that was measured by infrastructure development and maintenance, Public healthcare, Solid waste management, the quality of education among others.
However, the common tax or revenue management activities alone were not enough to affect service delivery in Sub Counties, for this reason the conceptual framework also presents the intervening variables like human resources, finance and budgeting, information technology and internal audits and investigations which the researcher thinks could also influence provision of adequate social services to the communities in Sub counties.
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1.8 Significance of the study
The study is to help other stakeholders for example donors and the Central Government for planning and analysing linkages between local revenue, administration and performance as well as service delivery.
The research report is to be of benefit to academicians as they used it for relevant literature reviews while carrying out reseach in the similar area.
The finance and planning department of Kole District Local Government could established the causes of fluctuations in tax management.
The study is to be of great benefit to policy makers of Kole District Local Government in finding the solution to the problems in tax management and appraises their performance
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CHAPTER TWO LITERATURE REVIEW 2.0 Introduction
This chapter deals with service delivery in Local government, decentralisation, local revenue collection, tax administration, revenue collection and tax management, relationship between tax management and service delivery in local governments, and the conclusion of the study.
2.1 Service Delivery in Local Governments.
Uganda’s decentralization policy provided for transfer of powers and functions from central governments and departments to local governments. This mandate is embedded in the 1995 constitution of republic of Uganda. The provision of basic services such as water and sanitation, health care, primary education, feeder roads and agriculture extension services is left to local governments(MDLG, 2017).
However, the recent government’s policy of effectively deliver services and ensure value for money in the public expenditure. Some government policies which has been alarming impacts include the creation of new Districts and abolition of graduated tax. The creation of new Districts has put more expenditure pressure on local governments, reducing and in some cases taking away completely resources that could have been used in increasing and improving service delivery(Bray, 2008). This therefore, calls for placing “a high priority on delivery of personalised efficient customer service” Moumey, (1991)> Attitudes exhibited by the service providers, employees, and managers must be aimed at developing good working relations and ensuring that the customers are handled well while being served (Musgrave,1991), define public sector as ” those industries and services in a country that are owned and run by the state, such as ” education and railways (in many countries) in comparison with the private sector. Thus delivery entails public sector delivery mechanism to the local residents of local government(Bray, 2008).
Nangobi, (1987) defined Service delivery as an ” attitude or dispositional sense, referring to the internalisation of even service values and norms. They further said that the service delivery is concern with supplying ‘’superior products” based on the opinion of the customer (Kaziba, et al., 2017). Whereas, Kitimbo, (1995) assert that service delivery should be designed in such a way to provide maximum level of location and time, Cousell, (1994) confirms it by saying that location of service delivery and their accessibility contribute to customer needs and preferences satisfaction.
According to National Service Delivery Survey (NSDS, 2000), it was noted that effectiveness to service delivery in local governments should be equivalent to the expenditure amounts allocated to various items in regard to National Programme Priority Areas (NPPA). This reports include some other attributes like the perception of service delivery and the level of achievement of value for money by the local, to
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determine the level of achievement of the local governments in attaining reasonably the levels of service delivery to its residents/tax payers(Ureen, 2013).
In contrast, fitz w Bingling, (1997) requires that service delivery should take in consideration the completion rate and recovery rate by service providers and Minnesota, (2008) found out that since technocrats undertake service delivery on behalf of the governments, thus there is need for ” a bottom up” prioritising to have effective spending public funds(MDLG, 2017).
If prioritizing is not taken into consideration. Only those government that take decisions to provide an effective service delivery, architecture will be able to cost effectively meet citizens continually rising expectation of government services(Best, et al., 2015). They argues that since service delivery remains agency centred such that government forced citizens to interact with them the way they are organised instead the way that best makes sense from citizens’ perspective, some of service provided remain unattended to.
According to the Uganda Particulars Assessment process, (Wakiso District, 2001), it was indicated that people are unhappy with the service provision. The local are much concerned about the quality of services yet most of the poor are scared of inaccessible services, the quality of health service delivery to mismanagement of public funds. Lack of transparency, accountability and consultation from the poor people who never get to know of the services provided and participate little or not planning for their funds.
Thus from the above discussion, there is need for local government to provide enough information concerning service delivery to the residents. In the budget, service delivery can be strengthened through a number of ways;
> Improved service delivery
> Strengthened the governance and accountability
However, Zola (1997) notes that despite the government’s determination and commitment, some of their expectations will take long time to be realised because we have to live in the resources that our country can afford. Tax evasion and avoidance is also explained by, Snavely, (1998) that compliance for Communities to pay taxes to finance service delivery requires sending messages in media tracing the benefits of compliance.
According to, Abigaba, (1996) the decentralization of local authorities had a loopholes in the tax management and efficiency of service delivery. This was due to the fact that laws were not clear at times at who should manage taxes and to whom to offer services, the poor accounting system, untrained personnel and politicians all affected the performance of local authorities. This is in agreement with,
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Babiiha, (2002) who noted that the sub counties in Kole District give water programmes a less priority thus giving minimal water sources.
2.2 Decentralization
Decentralization means the transfer of responsibility from the central authorities to local units for planning, management, resource raising and allocation of resources (Best, et al., 2015). Decentralization as a concept is about the ” transfer of legal administrative and political authority to make decisions and manage public functions of central authorities to the field organisation of those agencies, like subordinate units of government, semi-autonomous corporations, functional authorities, local government or nongovernmental organisation.
In addition to that, decentralization is defined as the ” spatial relocation making that is transfer of some responsibility or authority from higher to lower levels within the central government ministries or agencies(Kleven, et al., 2015). The type of decentralization include de-concentration, financial decentralization, devolution and delegation. Decentralisation includes new system for inter-governmental transfers, financial regulations and accounting and budget procedures which give equal opportunities for both local government and central government to carry out revenue collection, budgeting and planning for the collected money (Auriol & Warlters, 2005).
The Local Government Finance Commission Reports 1st February, 1995-December, 1996 states that the mission of financial autonomy through effective and efficient mobilization of own resources and practicing accounting, transparency, accountability and responsible spending of public resources. Financial decentralization is backed by a legal framework both in the 1995 constitution of Uganda (Article 152, 191 and 196), financial and Accounting Regulation, (1998).
Decentralised local government possesauthority to levy taxes not levied by central authorities and collect income from local sources and decide how to spend it. When badly done, decentralization, however, may increase regional imbalances, jeopardize macro-economic stability and lead to economic inefficiency. Fiscal decentralization with little or no adequate institutions like a strong system at all levels of government, clear rules governing revenues and expenditure assignments and a well-designed system of transfers between government levels reduces fiscal accountability and leads to macro-economic and allocation problems that may lead to severe economic crisis, Richard Lopes Murphy, (1995).
Lutaaya, (1996) studying decentralization and its effect on social services delivery noted that though the process carries a number of benefits, it’s not yet properly rooted in the Ugandan political structure. He concluded that there is need to sensitize the people in all aspects of decentralization. The emphasis was on social service delivery(Gordon & Li, 1971).
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