AN IN-DEPTH EXAMINATION OF THE CHALLENGES FACING TAX ADMINISTRATION AS A REVENUE SOURCE IN CAMEROON: A CASE STUDY OF BÉLABO MUNICIPAL

CHAPTER ONE INTRODUCTION 1.1 Background of the Study Taxation remains a cornerstone of fiscal policy and public finance, serving as a vital mechanism through which governments generate revenue to fund public goods and services, and to drive socioeconomic development (Bird & Zolt, 2005). In countries like Cameroon, as in many developing nations, taxation plays a central role in government financing, enabling the construction of infrastructure and the provision of essential services such as education, healthcare, and social welfare (Dabla-Norris, Guerreiro, Haksar & Kim, 2019). The increasing demand for public revenue has placed considerable pressure on agencies responsible for tax collection. According to Dincecco (2016), the effectiveness of a nation’s tax administration directly influences its ability to mobilize financial resources. The efficiency of tax systems determines how well a government can leverage its existing tax base. Magumba (2019) emphasizes the need for tax institutions that are not only capable but also efficient and skilled in order to ensure adequate revenue generation. When tax administration is strengthened alongside improvements in public service delivery, it can significantly increase public trust in the fiscal system and boost compliance (Charmes, 2015). One of the critical challenges in tax administration lies in effectively enforcing tax policies. This refers to the ability of tax authorities to maximize revenue collection within the constraints of available resources and the statutory tax base (Dincecco & Katz, 2016). As Dom (2017) points out, countries with weak or ineffective tax administrations often struggle to maintain a stable revenue stream, which hampers their capacity to develop and implement sound administrative systems. Therefore, a thorough evaluation of tax administration efficiency and the factors influencing it is essential in order to build sustainable sources of public revenue. However, tax administration in Cameroon faces numerous challenges that undermine its effectiveness. The country’s tax structure is complex, characterized by multiple tax regimes, underdeveloped infrastructure, and inadequate enforcement capabilities. These issues have led to widespread tax non-compliance and substantial revenue losses (World Bank, 2019). At the local government level, these problems are often compounded by limited administrative capacity, a lack of taxpayer awareness, and the widespread existence of informal economic activities (Dabla-Norris et al., 2019). The Bélabo municipality, located in the eastern region of Cameroon, offers a relevant case for studying these tax challenges in a semi-urban setting. Despite having economic potential through agriculture, trade, and small enterprises, the municipality is hampered by issues such as tax evasion, dominance of informal businesses, and weak enforcement mechanisms (Fonjong & Oben, 2017). Given the importance of tax revenues for local development and the specific hurdles faced by tax administration in Bélabo, a detailed investigation into these problems is both timely and necessary (Dube & Casale, 2019). By closely examining the unique difficulties surrounding tax collection and enforcement in this municipality, stakeholders—including policymakers, tax officers, and researchers—can gain meaningful insights into the root causes of revenue inefficiencies and design targeted interventions to improve compliance and tax yields. As such, this study aims to explore the challenges confronting tax administration as a means of generating public revenue in Cameroon, with a specific focus on the Bélabo municipality. 1.2 Statement of the Problem Efficient tax administration is essential for sustaining economic development and ensuring fiscal stability. Yet, within the Bélabo municipality of Cameroon, the process of tax collection is riddled with challenges that compromise its effectiveness as a reliable source of government revenue (Ligomeka, 2019). Despite its importance, there is a noticeable lack of in-depth understanding of the specific administrative issues faced in this locality and how these affect the broader goal of revenue generation. This gap in knowledge necessitates a focused investigation aimed at identifying the key challenges limiting the efficiency of tax administration in Bélabo. The study also intends to assess the impact of these administrative issues on revenue collection and how they influence the socioeconomic development of the region. Accordingly, the research is designed to examine the problems surrounding tax administration as a source of revenue in Cameroon, with Bélabo municipality serving as the case study. 1.3 Objective of the Study The overarching goal of this research is to investigate the challenges affecting tax administration as a source of revenue in Cameroon, focusing on Bélabo municipality. Specifically, the study aims to: i. Identify the major challenges confronting tax administration in Bélabo municipality. ii. Assess how these challenges influence revenue generation in the area. iii. Suggest strategic measures that could improve the efficiency of tax administration in Bélabo municipality. 1.4 Research Questions To guide the research process, the following questions have been developed: i. What are the major challenges encountered by tax administration in Bélabo municipality, Cameroon? ii. To what extent do these challenges affect revenue generation in the municipality? iii. What strategic solutions can be implemented to enhance tax administration efficiency in Bélabo municipality? 1.5 Significance of the Study This study holds value for several key stakeholders: Policymakers – The insights derived from this research can inform the formulation and implementation of tax reforms that are tailored to address the specific issues faced in Bélabo municipality. By understanding the unique obstacles present, policymakers will be better equipped to craft tax policies that improve compliance, close existing loopholes, and enhance overall revenue mobilization. Academic Community – The study contributes to the growing body of literature on tax administration in developing countries, particularly at the municipal level. Scholars, researchers, and students interested in public finance, governance, and fiscal policy can benefit from the findings, which offer practical and theoretical implications for future work in the field. 1.6 Scope of the Study This research focuses on the role of taxation in Cameroon’s economic development, with a specific emphasis on Bélabo municipality. Empirically, it aims to pinpoint the challenges facing tax administration in the municipality, analyze the extent to which these issues affect revenue generation, and propose actionable strategies for improving the performance of tax systems at the local level. 1.7 Limitations of the Study As with any academic endeavor, this study faced certain constraints. Limited financial resources affected the researcher’s ability to access all necessary materials, literature, and data collection tools (such as the internet, questionnaires, and interviews). Consequently, the sample size selected for the study was moderate to remain within budgetary constraints. Additionally, the researcher had to balance this project with other academic responsibilities, which restricted the amount of time that could be devoted exclusively to research activities. 1.8 Definition of Terms Tax Administration: The institutional process by which government authorities implement and enforce tax laws to collect dues from individuals, businesses, and other taxable entities. This includes assessing taxes, collecting payments, enforcing compliance, and providing services to taxpayers. Revenue Mobilization: The act of raising funds for government use through various channels, predominantly taxation, as well as through levies, fines, and other public income sources. It is crucial for funding public services and supporting national development. Tax Compliance: The degree to which individuals and organizations fulfill their legal obligations by accurately reporting earnings and paying the required taxes within stipulated timelines. It reflects the overall willingness of taxpayers to abide by tax laws. Informal Sector: This refers to economic activities that occur outside formal government regulation or recognition. These are typically characterized by unregistered businesses, casual labor, and noncompliance with tax regulations. Fiscal Stability: A state in which a government can sustainably manage its finances by generating adequate revenue, controlling expenditure, and minimizing reliance on debt or external aid. REFERENCES Dabla-Norris, E., Guerreiro, J., Haksar, M., & Kim, M. (2019). Financial Development in Sub-Saharan Africa: The Role of Institutional Quality. IMF Working Paper, 19(2), 1-37. Fonjong, L., & Oben, E. (2017). Urban Governance and Spatial Planning in Cameroon: A Case Study of Bélabo Municipality. 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