Taxation and Agricultural Financing: Perspective from Niger State Local Government Assessment

Abstract

This study examines the effect of taxes’ income on agricultural financing in Niger state local government. Three local governments from each of Niger State's three senatorial/ geopolitical zones were selected. Data was gathered from the Niger State Local Government Commission, Niger State Ministry of Local Government and Chieftaincy Affairs. Panel data model components such as pooled regression, fixed effect model, Random effect model, and FGLS as well as Hausman test were employed in the study. The heteroskedasticity, VIF and Pearson Product Moment correlation were also employed to determine the multicollinearity in the variables employed. Findings revealed that tenement rate, and market fees have favourable and considerable impact on agricultural financing but development levy, hawkers permit and slaughter slab had positive but weak significant effects on agricultural Financing in all sampled Local government in Niger state. It was concluded taxation had positive impacts but weak significant on agricultural financing in Niger State local governments. This is to the fact that agricultural sector has drastically been neglected due to the insecurity of both human and materials, and nonchalant attitude of the farmers. It is recommended that Local government should device means of providing security for the loan and farmers for easy recouping of loan given to all the farmers for effective utilization and repayment. Also, monitoring should be given to the collection of taxes revenue in order to bring more taxpayers into tax net for enhancement of tax revenue and financial assistance to the local government and farmers respectively.