ISSN: 2222-6990
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Despite fiscal decentralization reforms aimed at enhancing local autonomy and promoting grassroots development, many local governments in developing countries continue to face challenges in revenue mobilization. In Ghana, fiscal decentralization has transferred significant expenditure responsibilities to local governments without a corresponding expansion of their revenue-generating capacity, thereby constraining effective service delivery. Against this backdrop, this study examines the key challenges affecting revenue mobilization at the local government level, using the Sefwi Wiawso Municipal Assembly as a case study. The study adopted a quantitative cross-sectional research design to assess conditions influencing local revenue mobilization at a specific point in time. Primary data were collected through structured questionnaires administered to 83 municipal staff drawn from departments directly involved in revenue administration and financial management. Data were analyzed using descriptive statistical techniques, including frequencies, percentages, and mean rankings, to identify institutional, administrative, political, and technological constraints. The findings indicate that institutional and administrative weaknesses constitute major impediments to effective revenue mobilization. Inadequate logistics, including limited transportation and insufficient revenue collection tools, reduce the efficiency and coverage of revenue collection. Weak enforcement of revenue by-laws enables tax evasion and revenue leakages. Low taxpayer compliance, driven by inadequate public education, perceptions of poor service delivery, and limited trust in local authorities, significantly undermines internally generated revenue. Political interference, particularly in enforcing sanctions against defaulters, weakens the authority of revenue officials and accountability mechanisms, thereby fostering non-compliance. Technological constraints also pose challenges, as reliance on manual systems limits efficiency, accurate data management, and transparency, while facilitating revenue leakages. The study concludes that improving local revenue mobilization requires institutional reforms, strengthened enforcement mechanisms, reduced political interference, enhanced administrative capacity, and the adoption of digital revenue collection systems. Improved taxpayer education and service delivery are also essential for building public trust and enhancing voluntary compliance.
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