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Property Tax is an Untapped Goldmine in Nigeria

Professionals on tax matters and real estate sector have called for an overhaul of the policy that renders land administration system ineffective and costly over the years.

They also want the Joint Tax Board to design a model property tax, which States could adopt as minimum benchmark and the need to give enforcement to the provisions of all existing laws by regularly initiating requisite actions by organs, offices or persons saddled with its responsibilities.

The speakers made the submissions at an International Conference themed: “Making Property Tax Work-Reform strategies for unleashing the full potentials (Fiscal and Non-fiscal) of property Tax for boosting Internally Generated Revenue (IGR) in Nigeria” organised by the department of Estate Management, University of Lagos in collaboration with Estate Surveyors and Valuers Registration Board of Nigeria (ESVARBON) at the University of Lagos.

Setting the tone of the discussion, the Head of Department, Estate Management, University of Lagos, Dr. Gabriel Babawale, said that the issue of property tax is widely acknowledged as one of the nations’ untapped goldmine despite the fact that it remained the most viable, relatively stable, substantial and veritable sources of internally generated revenue particularly for urban municipalities.

Babawale said the conference is expected to come up with an indigenous property tax system that combines; cost effectiveness, transparency and the peculiarity of the local market place for improved and sustainable revenue yields for the country.

Justifying the collaboration with Estate Surveyors and Valuers Registration Board of Nigeria (ESVARBON), in organizing the conference, the Chairman, Yinka Sonaike represented by the Registrar; Ifeanyi Uzonwanne said the board has the mandate to promote real estate education hence the need to collaborate with University of Lagos and draw the attention of policy makers to how they could use property tax as a veritable source that could generate revenue for government to carry out its responsibilities.

The Executive Chairman, Federal Inland Revenue Services, Mr. Tunde Fowler in his remarks emphasized that different levels of government must take the idea of generating revenue through property tax very serious as efficient tax regime on property portends good potentials for the nations’ speedy development.

Represented by a director in the agency, Peter Olayemi lamented that the revenue realized from property tax hasn’t been much in recent times, with statistics showing that only Lagos and some few states have fully harnessed the source of IGR while other states are not doing much in that regard.

In his presentations, the Country Leader, Cromwell Professional Services International Limited, Sola Enitan, said for an efficient property reform, there should be a review of property tax exemption for Non-Governmental Organisations, philanthropist activities and Faith-based organisations that are involved in commercial activities.

He explained that there should be strict implementation and enforcement of compliance with code of ethics and professional standards for all professionals to avoid under reporting of property values and Implementation of Merchant Transaction Reports (MTR) for transactions on valuable items like jewelleries, luxurious house fittings, fixtures and finishing, private jets, luxury private boats, amongst others.

Speaking on: “Property Taxation In Nigeria – Interrogating The Policy and Law Towards Sustainable Reform”, Prof. Abiola Sanni observed that in a federal system, allocation of taxing powers is usually done in such a way that each level of government will have access to at least one broad-based inelastic tax handle for sustainable “own” revenue. On the contrary, he said Federal allocation commencing in 1999, has shifted Local Government finance from taxation to dependence on allocation thereby paving way for lack of sufficient “own independent revenue”, extortion and illegal collection of revenue at the Local Government level.

According to him, findings has shown that the Constitutional framework for tenement has hindered some states in their attempt to redesign their property tax coupled with lack of comprehensive law on property taxation, lack of jurisprudence as well as lack of review of Land Use Charge since its inception.

Earlier, the Lagos State Commissioner for Finance, Jeremiah Ashade said charging and collecting property tax by government has both moral justification and sound economic basis. For him, the value of land to a large extent, and of land with buildings, generally owes nothing to the landowner but everything to the surroundings particularly government expenditure on roads, water, light, schools, and security.

According to him, without a rigorous and realistic tax policy, the economic development process of most countries including Nigeria would be seriously impeded. “In spite of its increasing popularity and great potentials, empirical and anecdotal evidences suggest that mere reform does not necessarily translate to improved yields from property tax if the reform is not couched and practiced with due regards to equity, cost-effectiveness and transparency which are the universal hallmarks of efficient property tax system”, he said.

culled from www.guardian.ng

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