Experts see property tax as tool to boost states’ IGR

Experts in the built industry have identified property tax as a basic tool for boosting state’s internally generated revenue (IGR). According to them tax systems in most countries have now passed the stage of simply being machinery for the collection of revenue for the Government. Taxation should be regarded as an active and potentially creative force in economic planning and development and above all, as a very useful agent of social change.

A property tax is a levy on a property expected to be paid by the owner. The tax is levied by the governing authority of the jurisdiction in which the property is located; it may be paid to a national government, a state or local government.

Speaking at the first 2013 National Mandatory Continuing Professional Development Seminar on State Internally Generated Revenue: The Place of Property Taxation recently held in Lagos, Adebakin Asaju, a professor, at the department of estate management, Federal University of Technology Akure, stressed that property tax in Nigeria remains an under utilized revenue source for local authorities.

To him, property tax revenue could be increased substantially through effectively improving four critical ratios of coverage, valuation tax rates and collections, adding that improved property tax revenue could contribute critical resources necessary to enable local authorities provide the level and quality of service required to sustain and promote further economic and social development in Nigeria.

Rowland Abonta, managing partner, Rowland Abonta and co. noted that in the United Kingdom and other developed nations, property rates and taxes contribute over 60 percent of their Internally Generated Revenue (IGR). “However, in Nigeria, except may be for Lagos State, property rates and taxes contribute less than 30 percent of our IGR,” he disclosed.

He fingered the lack of proper enabling laws for property rating and taxation, lack of enabling will on the part of authorities, the negative influence of oil wealth, lack of requisite man power and technical know how as some of the issues that have militated against an effective property taxation system in the country.

Highlighting the significance of an effective property taxation system, Asaju stated that, “worldwide property taxes are commonly employed as the main source of locally generated revenue for the good reason that there is no other main source of taxation revenue that is exactly geographically defined”