Pages: 1-22

Abstract

The increasing cost of running government coupled with dwindling oil-revenue has left various tiers governments in Nigeria - Federal, State and Local Governments with the need to evolve strategies to improve their revenue base. The bulk of most state’s revenue today comes from allocations from the federation account and value added tax and just minimally augmented with internally generated revenue (IGR) from taxes. There is therefore urgent need for the state government to consider more alternatives for revenue generation through which they can enhance their internally generated revenue. This paper is set out to examine ways of enhancing internally generated revenue (IGR) in states. The sub-objectives are to: Examine the current level of revenue generation in the states; Identify challenges that have impeded sufficient internal revenue generation in the states, and; to advance strategies that will enhance internal revenue generation in the states. The paper is descriptive and used only secondary date. It adopted the fiscal federation theory as the theoretical framework. The findings are that: internally generated revenue constitutes just a small proportion of the state finance; the current system of revenue generation is fraught with problems; the revenue base of the states is uneven, so narrow and need to be diversified. To enhance internal revenue generation, strategies such as establishment of a dependable data base which is accessible is required, eliminating all sources of revenue leakages through the automation of revenue collection system, tracking the underground economy for more revenue generation, diversification of the revenue base through wealth creation among others are necessary panacea