Abstract

Tax remains a major source of internal revenue generation to governments in the provision of essential social services around the world. In Cameroon, the assessment and collection of various legally-recognised taxes are guided by legal frameworks that try to ensure that such assessments and collections are within the ambit of each level of government’s tax jurisdiction and authority. But collecting these taxes is a major problem .

This is the essence of this paper. This study undertaken under the topic “Investigating The Various Problems of Tax Collection in the Buea Municipality had its general objectives to identify on challenges of tax revenue collection in the Buea Municipality with reference to The Buea Municipal Council.

The specific objectives of the study were; to investigate the problems plaguing tax collection in the Buea municipality, to examine the impact of poor tax collection and assessment on service delivery and to identify practical solutions to those problems.

Using descriptive methods of data collection and analysis, the study found out among other things that some problems plaguing tax collection in the Buea municipality include; inadequate logistics, insecure areas, tax evasion, inaccessible areas, inefficient monitoring of revenue collection officials, inadequate review of revenue sources, inadequate information by taxpayers.

The paper made conclusions and recommended the following ;The need for general sensitisation, the need for the  use electronic channels for tax declarations and payments, the need for accountability, provision of adequate logistics, strengthen supervision and employment of additional tax collectors

CHAPTER ONE

INTRODUCTION

1.1 Background to the Study

The desire to build a civilised country with a strong and sound economy is the desire of every country; including Cameroon. Tax payment is the demonstration of such desire, although some income earners see it as a means of exploitation by the government.

Prior to civilisation, the human race lived in disorderly societies where survival was for the fittest. It was an era when might was right and the weak were unprotected and vulnerable. According to Hobbes  (1651: 37 )that era was characterised by fear of death and there was no motivation for industry. He described the life of man as “solitary, poor, nasty, brutish and short”. Understandably, people were not satisfied living in that condition of  fear of the unknown where their freedom and prospect of self-fulfilment were curtailed. In men’s quest for a solution to this unsatisfactory state of nature, early philosophers propounded the social contract theory.

The social contract theory is a situation whereby, in order to protect people from the vagaries of the brutal state of nature, they surrendered their individual sovereignties to live in a society governed by laws which are enforced by others on their behalf. Thus the primary responsibility of the organised state is to safeguard the lives and properties of the citizens.. Governments evolved as a result of the necessity to organise societies into administrative units where the lives and properties of citizens can be safeguarded. How government raise the money to finance its role is where taxation comes in.

The importance of tax generated to the  Local and central Government  cannot be overemphasised. It is important  that local and Central Government in recent time should promulgate and introduce policy reforms in the country through taxation laws and policies which is a  major source of revenue generation.

Tax payment in Cameroon can be traced right back to the period of the 18th century when European nations started scrambling for territories in Africa. But prior to this period, the natives of Cameroon used to practice a form of taxation whereby families were to provide certain portions of their harvest to the chiefs. These could be seen in the form of crops, sales, labour etc.

Until 1994, the Cameroon government relied heavily on selective tax and tariff exemptions to promote the country’s economic and industrial development. This tax regime dated from 1960, the year when the country became independent and an investment code was introduced to attract foreign capital to encourage the promotion of import-substituting industries.

Today local taxation in Cameroon remains embryonic and tax resources are still basically the exclusive responsibility of the local Government, both in terms of collection and allocation of tax resources.

Fiscal decentralization (FD) devolves “taxing and spending powers from the control of central government authorities to government authorities at sub-national levels”. This entails determining their sources of revenue, tax rates and levels of expenditure. According to Larson (2004: 96), most local government collection systems strive to achieve three goals, namely; to accelerate the receipt of available funds, to Revenue generation and its challenges in Local government to safeguard the government’s cash and to keep banking costs to a minimum.

The term ‘Tax” generally denotes all incomes from , fees (charges), fines, loans which local authorities mobilised from within and outside their own jurisdictional arenas. Local authority collection systems vary depending on the size of jurisdiction, the payment methods allowed and the nature of revenues received (Larson, 2004 :452).

The Buea council operates under Law No 2019 /024 of 24th December 2019 organising councils in Cameroon which stipulates that  a council shall be a decentralised Public authority having a status of a corporate body.It shall have a legal personality and financial autonomy. It shall administer local affairs under the supervision of the state to secure economic, social and cultural development of its population by providing the following; Building of markets, Construction of rural roads, portable water , provide the population with healthcare facilities (health centers), Providing scholarships to the less privileged etc.

The Buea  council started as the Bakweri Clan Council in 1922  under the leadership of Chief Mbella Lifafa Endeley with the British Local governance in practice and became a full-fledged council on June 29th 1977 under presidential decree No 203/77

The Buea council (BC)  have operated under the leadership of the following:

• Chief Mbella Lifafa Endeley (1922)
• Hon Ray Lyonga Ikundi (1984-1987)
• Mr Beke Smith (1987-1995)
• Mrs Gladys Silo Endeley (1995-1996)
• Mr Mokake Endeley John (1996-2002)
• Mr Mbella Moki Charles (2002-2013)
• Mr Ekema Patrick Esunge (2013-2019)
• Barista David Mafani Namanga (2019 till present)

Because of the policy of decentralisation, a percentage of taxes (10%) in Cameroon is paid to the Buea council (BC)   and the rest to the state treasury. The core sources of revenues in the Buea council can be classified into internal and external sources. Internal sources include pay rates, user charges, development levies, income generating projects and local taxes while external captures additional funds from outside the local government(LG) which are provided in the form of government transfers, grants and loans, among others.

However, over reliance on external revenue sources, increases the dominance of the central government on local authority, reducing them to mere “talking shops without finance to implement their decisions”.As such the council has to lay more emphasis on tax collection in-order to be financially independent.

Since the Buea council is a lower tier of the  governments created to serve the people and provide linkages between the grassroots and the central government, this study will therefore investigate the problems of tax collection and suggest the way forward to development at the grassroots

1.2 Statement of the Problem

Pressure put on the BC by  its citizens for improved service delivery has increased the need for them to generate more revenue through local taxes.An example is the increase in the population of Buea without a corresponding increase in water tanks creating a shortage relative to demand. Resource generation through local taxes and voluntary contributions  are part of the mechanisms to achieve this objective (Bahl, R. Miner, J. and Schroeder, L. 1984.:56).

The amount of tax generated by the BC cannot  provide all the basic services needed by its local increasing population . It is imperative to generate resources that will adequately  provide the basic needs of the population.

Law No 2019/024 of 24th December 2019 to institute the general code of local and Regional Authorities gives the BC competence to generate revenue through local taxes. The 2019 Decentralisation law gives them Financial autonomy and the power to mobilise their resources. However, the BC still finds it difficult to carry out this process due to low tax generated.

It is therefore imperative to understand the problems faced by the BC in Tax collection and to ascertain if the problem is coming from inadequate performance by the BC  or by Unwillingness on the part of  taxpayers to meet up with their tax obligations (Tax evaision )   The foregoing raises a number of questions that this research seeks to provide answers.

1.3 Research Questions

The research revolves around three(3) questions which are;

1. What are the problems plaguing tax collection in the Buea municipality?
2. What are the impacts of poor tax assessments and collection on service delivery?
3. What are the possible solutions to these problems?

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