THE IMPACT OF COVID-19 ON INTERNALLY GENERATED REVENUE OF SOUTH-WEST NIGERIA
DOI:
https://doi.org/10.47604/ijfa.1666Keywords:
COVID-19, Internally Generated Revenue, South-West, Taxes, Lagos State, Ogun StateAbstract
Purpose: the paper investigated the impact of COVID-19 on the Internally Generated Revenue (IGR) of southwest Nigeria comprising Ekiti state, Lagos state, Ogun state, Ondo State, and Osun state, Oyo state.
Methodology: the authors sourced data from secondary sources; the Internally Generated Revenue was obtained from the annual publication of the National Bureau of Statistics covering 2019 and 2020 and the COVID-19 confirmed cases were obtained from National Disease Control Centre.
Findings: The result showed that paired correlation of IGR 2019 and 2020 showed a strong positive correlation and the same was also true of COVID-19 cases and IGR 2020 (p = 0.001). The result of the t-test showed no significant difference (p > 0.05) between IGR 2019 and IGR 2020 quarter on quarter.
Unique Contribution to Theory, Practice and Policy: The result supported two theories; The ‘Pecking Order Theory and Ability-To-Pay, Internally Generated Revenue focuses on funds derived within the state, just like internal financing to a firm. The internally generated revenue did not decline during the pandemic because taxes were paid since the majority were paid salaries during the pandemic and transactions were conducted online via platforms, more importantly, the Central Bank of Nigeria did not shut down so economic activities were not paralyzed but migrated to online. The study proved that in times of crisis, IGR may not be adversely affected if all the channels of generating income are available to taxpayers. This aids budget and planning during a crisis period, furthermore, the government will be able to plan and channel funds to areas of need accordingly. The result further supported the new model of working; people can work remotely and pay their taxes despite the lockdown.
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