As revenues of government at various levels dwindle, an expert in the real estate industry has urged the authorities to unlock the potential inherent in property taxation to increase their incomes.
In his presentation on: ‘Property Taxation as a Source of Income for Governments in Nigeria – Issues Arising,’ Principal Partner, Ubosi Eleh and Co., an estate surveying and valuation firm, Mr Chudi Ubosi, pointed out that property taxation has remained a revenue head that is sorely undertapped.
He listed capital gains tax, withholding tax, stamp duty, consent fees, registration fee, development charges/levy, land use tax, regularisation of title charge, value added tax and estate duties as types of property tax in Nigeria.
Ubosi said in terms of property taxation, government at various levels have not taken it as seriously as they should, pointing out that easy money from the Federal Government is a major challenge to property taxation in the country.
He listed inadequate data on properties, wrong valuation, under/over assessment, poor publicity, cause of increase in property value, disincentive to property development and high tax/rates as set back to unlock property taxation.
He explained that high taxes/rates demanded because of the constant pressure for funds have become a problem and many times regarded as punitive.
“Most of the taxes are passed to the end users directly or indirectly,” he said.
Ubosi added that poor work ethics/nonchanllant in collection of taxes; lack of visible impact of taxes paid; no account is taken of owners ability to pay and poor administrative processes as setbacks.
While stating the advantages of property taxation by the government to shore up revenue, Ubosi noted that real estate identifiable and ownership is rarely in contention.
According to him, real estate is stationary and unlike human beings, cannot be moved or change location, adding that it is easy to administer, collect and calculate, pointing out that owner and administering authority could both easily determine liability.
“Ad Valorem tax. The higher the value, the higher the tax. A good tax administration system will, as a by product give a census of the total properties in the localities. An invaluable tool for planning and provision of services and infrastructure.
“Good tax regime will encourage property owners to regularise their titles. Tax administration can be used to control land use patterns,” he said.
For government to shore up its revenue, he explained that property taxes which have been highly disregarded needed to come into play.
Success, Ubosi said, would depend on implementation and administration, adding that professionals should be employed for the enumeration and valuation of properties.
He called on government to embark on aggressive public awareness campaigns and continued sensitisation of the public about property taxation.
“Government must show transparency and accountability. Penalties for non payment and evasion,” he said.
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