EXAMINATION OF PROBLEMS AND PROSPECTS OF REAL PROPERTY TAXATION IN NIGERIA
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EXAMINATION OF PROBLEMS AND PROSPECTS OF REAL PROPERTY TAXATION IN NIGERIA
ABSTRACT
Rising demand for urban development on land and declining revenue allocations in Nigeria have prompted the Rivers State Government to enact the Land Use Charge Law (2001) as a means of generating internally generated revenue through property tax. The Law, among other provisions, establishes a system for calculating the Charge due on properties in Lagos State.
The purpose of this study is to identify the difficulties and potential for real property taxation in Nigeria. According to this study, excessive taxes and fines may inhibit investment in new housing and the maintenance of existing real estate in Nigeria. It consequently proposed a review of the Land Law as well as a suitable basis for fair and equitable taxation.
Chapter one
INTRODUCTION
The subject of taxation has garnered significant intellectual and theoretical attention in the literature. Taxation is one of the most combustible issues in government, whether in developing and established countries. According to James and Nobes (1992), a tax is a “compulsory levy imposed by a public authority for which nothing is directly received in return”.
Based on Nightingale (2001), “a tax is compulsory contribution, imposed by government, and while taxpayers may receive nothing identifiable in return for their contribution, they nevertheless have the benefit of living in a relatively educated, healthy and safe society” .
She goes on to say that taxation is part of the price to pay for an organised society and identifies six reasons for it: provision of public goods, redistribution of income and wealth, promotion of social and economic wellbeing, economic stability and harmonisation, and regulation.
In other terms, a tax is a government-imposed levy on the income, profits, property, wealth, and consumption of individuals and corporations in order for the government to collect the necessary revenue to provide basic comforts, security, and well-being to residents. The first detailed taxation information may be found in Ancient Egypt (Webber and Wildavsky, 1986).
To remove the motivation to enrich themselves, the Pharaohs appointed tax collectors (known as scribes) and paid them large wages. A crew of special scribes from headquarters also oversaw scribes working in the field. Today, tax agency corruption persists, particularly in poor countries.
Nigeria is governed by a federal system, with the government’s fiscal power distributed among three tiers: the federal, state, and local administrations, each with its own tax jurisdiction.
Nigeria’s tax system is uneven. The federal government controls all major revenue sources, including import and excise tariffs, mining rents and royalties, petroleum profit tax, corporate income tax, and value added tax.
State and municipal government taxes are modest, limiting their ability to generate independent revenue and forcing them to rely primarily on Federation Account allocations.
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