Beyond Statutory Federal Allocation: A Critical Evaluation of the Contribution of Personal Income Tax on Internally Generated Revenue of Benue State

Abstract

Internally generated revenue of the various state governments in Nigeria has consistently been on a decline owing to the neglect of this source of revenue and consequent preference on the statutory federal allocation. This is confirmed by the inability of the various state governments to even pay salaries and provide the basic infrastructural and social needs of its citizens. Considering the foregoing, the study examined the impact of PIT sources on IGR of Benue state government. The research utilized secondary sources of data from the budget office of ministry of finance from 1999 to 2014. The data were analyzed using multiple regression through (Eview statiscal package). The Augmented Dicky-fuller test ADF and diagnostic test were carried out to test for data stationarity, multicollinearity and serial correlation. Findings show that PIT contributes significantly to IGR of Benue state during the period under study and hence recommend that the state should improve on these various sources of revenue as it is a genuine source through which the government deficits finances can be solved.