Welcome, Guest: Join Nairaland / LOGIN! / Trending / Recent / New
Stats: 2,800,207 members, 6,692,806 topics. Date: Wednesday, 26 January 2022 at 10:24 AM

Why Property Tax Must Be Fully Implemented In Nigeria | Nigeriarealestatehub.com - Properties - Nairaland

Nairaland Forum / Nairaland / General / Properties / Why Property Tax Must Be Fully Implemented In Nigeria | Nigeriarealestatehub.com (6842 Views)

(WITH VIDEO) For Those That Want To Live And Work In A Tax Free Zone In Lagos. / See The New Outrageous Kano State Property Tax (pics) / 1.5% Property Tax. (2) (3) (4)

(1) (2) (Reply) (Go Down)

Why Property Tax Must Be Fully Implemented In Nigeria | Nigeriarealestatehub.com by lummyglow(m): 4:48pm On Sep 17, 2015
In 2001, the Lagos State Government promulgated the Land Use Charge law in response to the increasing demand for provision of urban and rural infrastructures occasioned by dwindling federal revenue allocations. 14 years later the land use charge law is still not widely accepted. Majority of Lagosians don’t even see the justification or the rationale for its promulgation, a lot more also feel its only another avenue to milk the masses dry.

Also, it was perceived in some quarters that the amount of charge payable which is considered to be inappropriate would be a major setback to the fulfillment of the law. There have even been arguments that the high charge and the penalties involved would discourage investment in new housing and maintenance of existing stock. Recently Abuja followed suit and before you batt an eyelid it could take full swing in the entire polity. Reason why it becomes paramount that the issue of the full implementation of property tax in the country needs a surgical procedure

What is Property Tax

Property tax is generally a tax imposed by municipalities upon owners of real property within their jurisdiction based on the value of such property. This form of tax is reported to be one of the most stable sources of revenue to governments however most state and local governments in Nigeria are yet to tap revenue from this form of tax. In developed countries, revenue generated from this tax is used to provide basic amenities to the people.

Throughout the world property taxes are commonly employed as the main source of locally generated revenue for the good reason that there is no other major source of taxation revenue that is exactly geographically defined. It is possible to use local income taxes and/or local sales taxes for generating local government revenue but both have difficult administrative problems. Local revenue may be generated from other sources, particularly rents from local government owned properties. In some cases, local income taxes are an important source of revenue. In many cases, however, property tax is the main source of revenue (and even when local income taxes exist, it may be easier for a local government to modify the property tax rate than to adjust the income tax rate).

Challenges in Property Taxation

No perfect policy exists due to challenges in human endeavours not even in a country where ‘stealing is not corruption’ in the words of the immediate past President of Nigeria. Thus, the following problems should be avoided and if possible eradicated to ensure a good tax system that ensures the attainment of public goods

Assessment and valuation inconsistencies: Determining the appropriate rate of tax most times requires expert opinion and usually this is not available. Very skilled personnel are needed to carry out this activity. This greatly affects the accuracy of collected data. Lack of skilled manpower leads to under-valuation thus reducing government’s revenue, while over-assessment results into disputes which may delay payment of property taxes.

Illiteracy and ignorance: This has over time been seen as a major hindrance to the collection of property taxes. To a great extent, affected individuals either do not see a need/importance of it or they do not know anything about it. More so, a lot of Nigerians have lost faith in our government. They see it as another avenue created by the government to take the masses on a reckless ride to poverty Inn

Legal documents: The statutory nature of property taxation makes it necessary to be provided with appropriate legal documents or aiding laws to back up its activities. Most times these documents either are not in existence in the region or they fall short of some provisions. To ensure successful property taxation in the country, tax laws need to be either created or modified to fit present day activities.

Attitude of the tax payer and taxing authority: No one wants to pay tax to the government on the protest that they do not know what the tax is used for. However they still need public facilities

Prospects of Property Taxation

The choice for a good tax for local governments is limited compared to both the choices of federal and even state governments in Nigeria. This is because the higher levels of government are larger, cover jurisdictions having larger populations and have a greater capacity for tax administration if effectively managed. A number of conditions should be met for a tax to be a good tax that meets the challenges of the 21st century
The revenue of a good tax at all levels should increase over time in order to match the natural growth in costs and to fulfil the growing needs of public services.
Taxes should not be too sensitive to cyclical fluctuations.
A good local/state tax should be distributed relatively equally among local governments. Equalisation of the revenue between local governments may be required to enhance differences in access to tax base.
There should be a close relationship between the citizens who pay and the citizens who benefit.
The tax administration should be inexpensive to administer, i.e. the tax yield should be much higher than the administrative costs. A realistic target is that the cost of administering a property tax should be significantly less than five percent of the revenue generated.
The administrative cost is arguably the biggest constraint to the growth of the property tax. It is just too expensive, and too hard to properly levy and enforce. So, countries are turning increasingly to “shortcuts” to address this problem. The introduction of the notional valuation based on location and area, self-assessment, indexing between valuation periods, and the exemption of the hard to tax properties are all examples of such shortcuts.
If the government of any state in the federation is hell-bent on implementing property tax in their localities, then the right steps must be taken for its acceptability. If the citizens cannot see the genuineness in the government’s approach towards the implementation of property tax then it will be a lost cause. The following must be put on the front burner for the implementation of a property tax regime.
A comprehensive study should be made, by the government of states that are yet to instigate a property tax regime and its relevant authorities, in the states reported to having administered one form of property tax or another to see how these taxes were brought into law, how they are administered, the revenue/ benefits derived and what challenges are faced.
More professional staff both estate surveyors and valuers, and tax administrators should be employed by the government in both the Ministry of Lands and Housing and States Board of Internal Revenue as this will bring in people with professional knowledge and expertise with regards to this tax, who will bring about the realisation of these taxes in the states of the federation.
Detailed and up-to-date records should be kept of properties in the various states as this will enable the government in assessing taxable properties when finally the collection of such taxes is fully enforced. This is necessary if a successful property tax administration is to be achieved.

The success of determining property tax largely depends on proper land registration and adequate documentation. These are however the major low-points hindering effective land management in Nigeria.

What’s your thought on the possibility of a full implementation of property tax in the entire country?


You can read more on Property Tax and other articles like this at nigeriarealestatehub.com (nigeria's number one real estate information portal)
Re: Why Property Tax Must Be Fully Implemented In Nigeria | Nigeriarealestatehub.com by chibike69: 7:02am On Sep 07, 2017
finally I don make am



FTC!!!



sekem sekem sekem


oya wey my money abi award
Re: Why Property Tax Must Be Fully Implemented In Nigeria | Nigeriarealestatehub.com by id4sho(m): 7:05am On Sep 07, 2017
Story
Re: Why Property Tax Must Be Fully Implemented In Nigeria | Nigeriarealestatehub.com by Johngla(m): 7:06am On Sep 07, 2017
.
Re: Why Property Tax Must Be Fully Implemented In Nigeria | Nigeriarealestatehub.com by Unbreakable007: 7:06am On Sep 07, 2017
Wake me Whn it stops raining


Don't understand dz kind Buhari rain dz morning

3 Likes

Re: Why Property Tax Must Be Fully Implemented In Nigeria | Nigeriarealestatehub.com by lilbabyak(m): 7:07am On Sep 07, 2017
I read the first two paragraph and got tired. I'm not made for long epistle. But I think the writer knows what he is saying

1 Like 1 Share

Re: Why Property Tax Must Be Fully Implemented In Nigeria | Nigeriarealestatehub.com by rhektor(m): 7:07am On Sep 07, 2017
At least this will curb the excesses of some people, how could just one man be having up to 50 cars and be paying nothing on those cars? How could people build houses and not pay tax on them? And the tax collector will be chasing mama Nkenchi the food vendor and Nnamdi the spare part seller, Bashiru the mechanic and Segun the tailor about? As if it the the poor man that offended the government.
Nonsense

14 Likes

Re: Why Property Tax Must Be Fully Implemented In Nigeria | Nigeriarealestatehub.com by felixomor: 7:09am On Sep 07, 2017
Countries that pay property tax dont run the type of politician-centred govt we run.

They provide social welfare, healthcare and infrastructure for their citizens.
They don't give their politicians fat allowances like us.

The govt is not serious to be demanding such.
Sorry to say

41 Likes 2 Shares

Re: Why Property Tax Must Be Fully Implemented In Nigeria | Nigeriarealestatehub.com by morikee(m): 7:10am On Sep 07, 2017
��
Re: Why Property Tax Must Be Fully Implemented In Nigeria | Nigeriarealestatehub.com by meeky007(m): 7:10am On Sep 07, 2017
so d tax we are paying is not enough abi
who wan chop who

8 Likes

Re: Why Property Tax Must Be Fully Implemented In Nigeria | Nigeriarealestatehub.com by Nobody: 7:10am On Sep 07, 2017
There are some taxes in the tax laws that are fully implemented.
Re: Why Property Tax Must Be Fully Implemented In Nigeria | Nigeriarealestatehub.com by davillian(m): 7:11am On Sep 07, 2017
Tax for the good road,security,hospital,water,power and education that the government has provided us.
I see this as another means to enrich them selves.
Other countries have used their revenue from crude oil to develop their countries but here in Nigeria we have been chasing one political thief or the other.
The world is going green and we would drink and eat our crude oil very soon.

1 Like

Re: Why Property Tax Must Be Fully Implemented In Nigeria | Nigeriarealestatehub.com by omowolewa: 7:13am On Sep 07, 2017
My little ache with property tax is that the base depends on government valuations.

The valuer picks an area, conduct a random assessment and makes it a general value for assessing all houses in the area to tax.

All in all, the tenants pay in long run (Property Tax o, Tenement Rate o, Service Charge o, Parking or wrong parking charge o)

But Lagos State which is the model state here is upping it's games on infrastructure development.

I believe that one if the ends where VAIDS efforts are directed.
Re: Why Property Tax Must Be Fully Implemented In Nigeria | Nigeriarealestatehub.com by jmichlins(m): 7:14am On Sep 07, 2017
chibike69:
finally I don make am



FTC!!!



sekem sekem sekem


oya wey my money abi award



na on top tax matter you go make am. Good and better news dey purge you?
Re: Why Property Tax Must Be Fully Implemented In Nigeria | Nigeriarealestatehub.com by okerekeikpo: 7:14am On Sep 07, 2017
Only the poor will pay, the big men and politicians will not pay and nothing will happen

2 Likes

Re: Why Property Tax Must Be Fully Implemented In Nigeria | Nigeriarealestatehub.com by TheKingIsHere: 7:14am On Sep 07, 2017
felixomor:
Countries that pay property tax dont run the type of politician-centred govt we run.

They provide social welfare, healthcare and infrastructure for their citizens.
They don't give their politicians fat allowances like us.

The govt is not serious to be demanding such.
Sorry to say

You deserve a presidential handshake for this comment.

This our government is very useless. How can you charge all these tax and yet fail to provide basic amenities for the masses.

Look at the health sector, education is detiorating, no security, nothing like social welfare because one Oga at the top would have looted everything.

The dumb OP should stop comparing Nigeria to developed countries.

15 Likes 2 Shares

Re: Why Property Tax Must Be Fully Implemented In Nigeria | Nigeriarealestatehub.com by makems(f): 7:16am On Sep 07, 2017
My dear,don't be quick to rejoice Because of people having 50 properties. It does not bother them. All they need do is increase rent. the poor are d ones to suffer it. Avenue for landlords to increase rent.

1 Like 1 Share

Re: Why Property Tax Must Be Fully Implemented In Nigeria | Nigeriarealestatehub.com by Nobody: 7:20am On Sep 07, 2017
okay..

A brand new set of lovely duplexes are up for sale and
the beautiful combination of Luxury and Affordability is
awesome. This Estate's Ambience is very lovely!

FACILITIES :
Fitted Modern Kitchen
Good water treatment plant
3car park for each apartment
Modern Brick wall finishing
Spanish floor titles in sitting room and corridors
Italian tiles in other rooms
Quality sanitary wears
Cctv and dstv. Connection ready
Electrical fittings ready
Good paved road with drainage
Dining Area in sitting room
Exclusive compound to yourself
Children play Area
Family lounge
Street light

LOCATION: Adjacent The Circle Mall and Shoprite,
Agungi, Lekki

TITLE: Governor's Consent

PRICE:
5 Bedroom + BQ Detached Duplex = #55m
4 Bedroom Semidetached Duplex = #48.5m
3 Bedroom Semidetached Duplex = #38.5m

Call/WhatsApp: 08138718647; 08075256644
info@naijapropertiesonline.com

www.naijapropertiesonline.com
Re: Why Property Tax Must Be Fully Implemented In Nigeria | Nigeriarealestatehub.com by Nobody: 7:22am On Sep 07, 2017
After everything, our senators will be buying more cars and others will be choping oil money meanwhile with all the tax they are collecting (vat, tax on salary) all those ones no do them......ok... issoryt.... the problem we have in Nigeria is not about collecting more tax its misappropriation of resources.

1 Like 1 Share

Re: Why Property Tax Must Be Fully Implemented In Nigeria | Nigeriarealestatehub.com by chibike69: 7:27am On Sep 07, 2017
jmichlins:
na on top tax matter you go make am. Good and better news dey purge you?

broda FTC na FTC even if na obituary
Re: Why Property Tax Must Be Fully Implemented In Nigeria | Nigeriarealestatehub.com by Chiidi(m): 7:32am On Sep 07, 2017
Re: Why Property Tax Must Be Fully Implemented In Nigeria | Nigeriarealestatehub.com by erico2k2(m): 7:42am On Sep 07, 2017
rhektor:
At least this will curb the excesses of some people, how could just one man be having up to 50 cars and be paying nothing on those cars? How could people build houses and not pay tax on them? And the tax collector will be chasing mama Nkenchi the food vendor and Nnamdi the spare part seller, Bashiru the mechanic and Segun the tailor about? As if it the the poor man that offended the government.
Nonsense
This is what happens when you speak about stuff yoy know nothing about . I bet you do t have a car cos if you did you will realize owning 50 cars means paying 50 vehicle licenses ? 50 road worthyness
So the same thing a one car person pays as statutory is what he will pay 50 .
People already pay taxes in different forms with the govt having nothing to show for it.
Permission and urban planning and other development fess for my house cost me over N1m in PHC . Yet the govt ha e nothing to show as regards what they use such money for.
What they are proposing is called Council Tax where I live . The owners of the houses do not pay but tenants . And if your house is empty you do t pay unless inhabited .

3 Likes 2 Shares

Re: Why Property Tax Must Be Fully Implemented In Nigeria | Nigeriarealestatehub.com by money121(m): 7:43am On Sep 07, 2017
Alrty
Re: Why Property Tax Must Be Fully Implemented In Nigeria | Nigeriarealestatehub.com by money121(m): 7:45am On Sep 07, 2017
Quotation for Classic Design( Plain Black)


Client: Nairalander

Site Location: Igbogbo Ikorodu Lagos State


Roofing 357sqm*2,800=999,600


Accessories

ridges caps 92m*1500=138,000
valley gutter 36m*1500=54,000
Nails 4pkt(35kg)*6000=24,000
Sealant 3sets *4,000=12,000
Installation 357*200=71,400
Transportation and loading, offloading=20,000


Grand Total=1,319,000

For Your Next Roofing Project.. Call/WhatsApp 08085310359

Re: Why Property Tax Must Be Fully Implemented In Nigeria | Nigeriarealestatehub.com by rhektor(m): 7:46am On Sep 07, 2017
erico2k2:

This is what happens when you speak about stuff yoy know nothing about . I bet you do t have a car cos if you did you will realize owning 50 cars means paying 50 vehicle licenses ? 50 road worthyness
So the same thing a one car person pays as statutory is what he will pay 50 .
People already pay taxes in different forms with the govt having nothing to show for it.
Permission and urban planning and other development fess for my house cost me over N1m in PHC . Yet the govt ha e nothing to show as regards what they use such money for.
What they are proposing is called Council Tax where I live . The owners of the houses do not pay but tenants . And if your house is empty you do t pay unless inhabited .

Thank you for your time however if people are paying as you claim I'm telling you it would not get to the level of excessive living maybe you don't know the principles of taxation
Re: Why Property Tax Must Be Fully Implemented In Nigeria | Nigeriarealestatehub.com by akigbemaru: 7:47am On Sep 07, 2017
lummyglow:
In 2001, the Lagos State Government promulgated the Land Use Charge law in response to the increasing demand for provision of urban and rural infrastructures occasioned by dwindling federal revenue allocations. 14 years later the land use charge law is still not widely accepted. Majority of Lagosians don’t even see the justification or the rationale for its promulgation, a lot more also feel its only another avenue to milk the masses dry.

Also, it was perceived in some quarters that the amount of charge payable which is considered to be inappropriate would be a major setback to the fulfillment of the law. There have even been arguments that the high charge and the penalties involved would discourage investment in new housing and maintenance of existing stock. Recently Abuja followed suit and before you batt an eyelid it could take full swing in the entire polity. Reason why it becomes paramount that the issue of the full implementation of property tax in the country needs a surgical procedure

What is Property Tax

Property tax is generally a tax imposed by municipalities upon owners of real property within their jurisdiction based on the value of such property. This form of tax is reported to be one of the most stable sources of revenue to governments however most state and local governments in Nigeria are yet to tap revenue from this form of tax. In developed countries, revenue generated from this tax is used to provide basic amenities to the people.

Throughout the world property taxes are commonly employed as the main source of locally generated revenue for the good reason that there is no other major source of taxation revenue that is exactly geographically defined. It is possible to use local income taxes and/or local sales taxes for generating local government revenue but both have difficult administrative problems. Local revenue may be generated from other sources, particularly rents from local government owned properties. In some cases, local income taxes are an important source of revenue. In many cases, however, property tax is the main source of revenue (and even when local income taxes exist, it may be easier for a local government to modify the property tax rate than to adjust the income tax rate).

Challenges in Property Taxation

No perfect policy exists due to challenges in human endeavours not even in a country where ‘stealing is not corruption’ in the words of the immediate past President of Nigeria. Thus, the following problems should be avoided and if possible eradicated to ensure a good tax system that ensures the attainment of public goods

Assessment and valuation inconsistencies: Determining the appropriate rate of tax most times requires expert opinion and usually this is not available. Very skilled personnel are needed to carry out this activity. This greatly affects the accuracy of collected data. Lack of skilled manpower leads to under-valuation thus reducing government’s revenue, while over-assessment results into disputes which may delay payment of property taxes.

Illiteracy and ignorance: This has over time been seen as a major hindrance to the collection of property taxes. To a great extent, affected individuals either do not see a need/importance of it or they do not know anything about it. More so, a lot of Nigerians have lost faith in our government. They see it as another avenue created by the government to take the masses on a reckless ride to poverty Inn

Legal documents: The statutory nature of property taxation makes it necessary to be provided with appropriate legal documents or aiding laws to back up its activities. Most times these documents either are not in existence in the region or they fall short of some provisions. To ensure successful property taxation in the country, tax laws need to be either created or modified to fit present day activities.

Attitude of the tax payer and taxing authority: No one wants to pay tax to the government on the protest that they do not know what the tax is used for. However they still need public facilities

Prospects of Property Taxation

The choice for a good tax for local governments is limited compared to both the choices of federal and even state governments in Nigeria. This is because the higher levels of government are larger, cover jurisdictions having larger populations and have a greater capacity for tax administration if effectively managed. A number of conditions should be met for a tax to be a good tax that meets the challenges of the 21st century
The revenue of a good tax at all levels should increase over time in order to match the natural growth in costs and to fulfil the growing needs of public services.
Taxes should not be too sensitive to cyclical fluctuations.
A good local/state tax should be distributed relatively equally among local governments. Equalisation of the revenue between local governments may be required to enhance differences in access to tax base.
There should be a close relationship between the citizens who pay and the citizens who benefit.
The tax administration should be inexpensive to administer, i.e. the tax yield should be much higher than the administrative costs. A realistic target is that the cost of administering a property tax should be significantly less than five percent of the revenue generated.
The administrative cost is arguably the biggest constraint to the growth of the property tax. It is just too expensive, and too hard to properly levy and enforce. So, countries are turning increasingly to “shortcuts” to address this problem. The introduction of the notional valuation based on location and area, self-assessment, indexing between valuation periods, and the exemption of the hard to tax properties are all examples of such shortcuts.
If the government of any state in the federation is hell-bent on implementing property tax in their localities, then the right steps must be taken for its acceptability. If the citizens cannot see the genuineness in the government’s approach towards the implementation of property tax then it will be a lost cause. The following must be put on the front burner for the implementation of a property tax regime.
A comprehensive study should be made, by the government of states that are yet to instigate a property tax regime and its relevant authorities, in the states reported to having administered one form of property tax or another to see how these taxes were brought into law, how they are administered, the revenue/ benefits derived and what challenges are faced.
More professional staff both estate surveyors and valuers, and tax administrators should be employed by the government in both the Ministry of Lands and Housing and States Board of Internal Revenue as this will bring in people with professional knowledge and expertise with regards to this tax, who will bring about the realisation of these taxes in the states of the federation.
Detailed and up-to-date records should be kept of properties in the various states as this will enable the government in assessing taxable properties when finally the collection of such taxes is fully enforced. This is necessary if a successful property tax administration is to be achieved.

The success of determining property tax largely depends on proper land registration and adequate documentation. These are however the major low-points hindering effective land management in Nigeria.

What’s your thought on the possibility of a full implementation of property tax in the entire country?


You can read more on Property Tax and other articles like this at nigeriarealestatehub.com (nigeria's number one real estate information portal)
Re: Why Property Tax Must Be Fully Implemented In Nigeria | Nigeriarealestatehub.com by erico2k2(m): 7:52am On Sep 07, 2017
rhektor:


Thank you for your time however if people are paying as you claim I'm telling you it would not get to the level of excessive living maybe you don't know the principles of taxation
You can't drive your car in Nigeria if you don't have your car licenced .for one hour . You will B forever bribing police besides it cost less than 30k to do it yearly.
About taxation trust me I know more than most Nigerians cos I live in England .

1 Like

Re: Why Property Tax Must Be Fully Implemented In Nigeria | Nigeriarealestatehub.com by LaExpert: 7:53am On Sep 07, 2017
rhektor:
At least this will curb the excesses of some people, how could just one man be having up to 50 cars and be paying nothing on those cars? How could people build houses and not pay tax on them? And the tax collector will be chasing mama Nkenchi the food vendor and Nnamdi the spare part seller, Bashiru the mechanic and Segun the tailor about? As if it the the poor man that offended the government.
Nonsense

If you look at the case of Nigeria carefully, you'll discover Nigeria is not ready for the full implementation of property tax.
Re: Why Property Tax Must Be Fully Implemented In Nigeria | Nigeriarealestatehub.com by rhektor(m): 7:54am On Sep 07, 2017
erico2k2:

You can't drive your car in Nigeria if you don't have your car licenced .for one hour . You will B forever bribing police besides it cost less than 30k to do it yearly.
About taxation trust me I know more than most Nigerians cos I live in England .
Disney I hear you say you can't drive your car in Nigeria without license? You must be outside Nigeria hearing news about Nigeria from Lie Mohammed grin grin grin grin
Re: Why Property Tax Must Be Fully Implemented In Nigeria | Nigeriarealestatehub.com by erico2k2(m): 8:01am On Sep 07, 2017
makems:
My dear,don't be quick to rejoice Because of people having 50 properties. It does not bother them. All they need do is increase rent. the poor are d ones to suffer it. Avenue for landlords to increase rent.
Exactly . Rents are already on the high side .
I thank God my parents where able to have thier house built after training us all
Re: Why Property Tax Must Be Fully Implemented In Nigeria | Nigeriarealestatehub.com by Jaqenhghar: 8:01am On Sep 07, 2017
You can tax us for every breath we take. 2 thongs will always remain constant in this cesspit.
1. Money will never be enough for the government
2. you will never see what the money is being used for

2 Likes

(1) (2) (Reply)

Sand House Made Lovely / Karcher(K2.21) high pressure House/car Washing Machine / Christal Villa Gold Extension, 1 Million Per Plot Ibeju Lekki

(Go Up)

Sections: politics (1) business autos (1) jobs (1) career education (1) romance computers phones travel sports fashion health
religion celebs tv-movies music-radio literature webmasters programming techmarket

Links: (1) (2) (3) (4) (5) (6) (7) (8) (9) (10)

Nairaland - Copyright © 2005 - 2022 Oluwaseun Osewa. All rights reserved. See How To Advertise. 215
Disclaimer: Every Nairaland member is solely responsible for anything that he/she posts or uploads on Nairaland.