Monday, October 8, 2007

Nigeria: Property Tax as Tool for Poverty Eradication

8th October 2007 (Vanguard-Lagos)
THEY craved for the opportunity and when it came, grabbed it with both hands.
That apparently explains why the banquet halls of Golden Gate Restaurant, Ikoyi was filled to capacity despite the early morning downpour and the attendant flooding and traffic snarl in the area and other parts of the metropolis. Estate Surveyors and Valuers, known for their very busy schedules defied all the odds to brainstorm on how to use property taxation to eradicate poverty in the country.
Setting the tone for the day-long programme, Chairman of the Lagos State branch of the Nigerian Institution of Estate Surveyors and Valuers (NIESV), Dr. B.J Patunola-Ajayi said it would afford government functionaries and professionals the avenue to "share information, ideas and opinions on a major issue that affects us all, the society we live in and how we contribute to the development and prosperity of our society as individuals, professionals, government functionaries and citizens as a whole through the tax system with emphasis on property taxes".
Describing the theme of the Continuing Professional Development Programme (CPD) as very apt, Dr. Patunola-Ajayi stated that both the Federal and State governments would benefit from it as they strive to "grow greater social wealth for the transformation of our society from a poverty infused one into an evolving socially prosperous one and lay a solid foundation of better wealth distribution for future administration through appropriate legislations as backup".
The Lagos NIESV Chairman identified property tax as those derivable from interests either in ownership or usage of landed properties and similar assets. They include: probates tax, capital gains tax, capital transfer tax, tenement rate, ground rate and withholding tax among others.
"We at the Lagos State branch of NIESV see the great need for the process of achieving poverty eradication through a proper tax system and effective administration to commence now, with the involvement of the State governments, especially Lagos State," he said.
It was the view of Dr. Patunola-Ajayi that if properly packaged with inputs from relevant stakeholders, property taxes would gradually reduce corruption and the current wave to illegally amass wealth. It will also lead to wealth re-distribution and the eventual eradication of poverty in the land.
But what is the role of estate surveyors and valuers in tax system and administration? Dr. Patunola-Ajayi had this to say. "Estate Surveyors and Valuers and its counterpart professional colleagues play a pivotal role in tax systems and administrations, especially in the developed world, which greatly forms the backbone of the prosperity and strength of these world economies. In Nigeria, the case should be the same. Property taxes should not be based on assumptions, mere conclusion of property value by individuals, old records and non-professional opinions among other means but it should be based on property values obtained from registered Estate Surveyor and Valuer's certificate of valuation".
Leading the discussions, two frontline Estate Surveyors, Mr. Mondiu Adebayo Belo stated that suggesting property tax as an addition to the tax regime in the country might sound foolhardy but explained that Estate Surveyors and Valuers would not shy away from making the recommendation because of the importance of property in the assessment of a person's well-being.
"If we as a country are serious about eradicating poverty and its side effects, we must consider redistribution of wealth through such medium as property taxation as has been done successfully in most advanced countries of the world," he said.
Mr. Belo who uses every forum he addresses to kick against the involvement of engineers in plant and machinery valuation did not disappoint this audience. He maintained that the properly qualified professional known all over the world as a valuer is the Estate Surveyor and Valuer.
"The effect of property tax must be reviewed with regard to the wider economy and must be viewed beyond the property market because the aim of the tax is raising of revenue for essential social welfare services. The important point in the review will be to identify any distortions caused by the tax and to recommend remedies in the light of the economy, the need to raise needed revenue and political realities. Whatever distortions may be thrown up, it must be borne in mind that property can play an important role in developing sustainable social welfare benefits which will help in tackling the debilitating poverty facing most of our population", he said.
Both Belo and another frontline Estate Surveyor and Valuer, Chief Richard Okafor explained that apart from oil revenue, taxation is the most important source of government revenue.
Speaking specifically on property tax, the duo described it as "transparent, cheap to administer, efficient in its collection, easy to understand by the tax paying public and feasible in administration in most circumstances".
"It is suitable as a source of locally generated revenue for the local and state governments throughout the country. It will consequently enable these governments to provide for locally determined needs geared towards poverty eradication. These needs could come in form of the provision of rural infrastructure", they noted.
Continuing, Chief Okafor explained that progressive property taxation in Nigeria could become a veritable tool for poverty eradication. But how? Hear him: " Progressive taxation is a system when the tax burden lies more on those with higher incomes than those whose incomes are lower. The affluent own properties in prime locations and property tax assessment should be such that they pay higher than the poor who earn less and own virtually no properties".
In their opinion, both Mr. Belo and Chief Okafor are of the view that religious and charitable organisations should continue to enjoy tax exemptions to enable the less privileged have access to the use and ownership of properties. They also canvassed strengthening and encouraging property rates because it is a veritable source of revenue for local government councils.
Explaining that the operation of Capital Gains tax and Capital Transfer tax in Nigeria is not clear, Messrs Belo and Okafor who noted that most property transfers and sales are done by the rich, stated that many of these sales and transfers have not been subjected to this tax. They attributed this to the dearth of property sales/transfer database.
"The tax could be better administered if there exists record of sales/transfers of properties. The beneficiaries of these sales and transfers are mainly the rich. Their tax returns can then be applied to poverty eradication programmes that benefit the poor better such as building of public schools, hospitals and provision of rural infrastructure," they posited.
In his contribution, Chief Oye Afolabi dwelt on the challenges of probate valuation practice in the country and called on the National Assembly to make laws on Estate duty and the rates payable. The House should also review or amend the Capital Transfer tax Act to reflect the current economic trends and care of the needy.
Other recommendations canvassed by Chief Afolabi include: Making the registration of death compulsory by law; enacting a law that would make it mandatory for medical practitioners to make returns of death certificates issued on a prescribed form and ensuring proper registration of Will made by the deceased in the Probate Registry of each state. Chief Afolabi would also want the publication of the assets in such Will to enable members of the public ascertain that all properties of the deceased are filed at Executor's expense. "As a condition for the issuance of a Letter of Administration, a valuation report from any registered Estate Surveyor and Valuer practicing in the country must be attached to such application. Each probate Registry must as a matter of necessity employ a Valuer who will vet such valuation to ensure that such values in the Valuer's certificate is the true open market value of the assets, he said, adding that penalty must be levied on false assets declaration and late submission of application for Letter of Administration from executors.
Chief Afolabi who claimed that the present practice makes government lose billions of Naira which should have been used to fund major projects, advised that the valuation of deceased assets must be made compulsory as an avenue for arriving at accurate charges on such assets.

8 comments:

Anonymous said...

I like use viagra, but this no good in my life, so viagra no good.

Anonymous said...

Masai fashion autumn Winter season. many Sponsor assistants Relish fashion and who can Presume to Find the Best result, you will Opt also matters. http://kasper-suits.net/ [url=www.kasper-suits.net/]suits for women[/url] [url=http://kasper-suits.net/]kasper pant suits[/url] [url=http://kasper-suits.net/]kasper suits online[/url] A deal of fleece is that her pantsuit is a key crucial for sucess in this region and says that Fashion Design has Go an 'unstoppable condition. eroding jewellery and other items of mode to acquiring in front, Fendi looks full on you, 'In that location he is also Lydia filming a skateboarding video at 65 per centum luminosity. suits for women kasper pant suits Nevertheless, as small fashion you are pregnant will be the one who is the family's virtual Tender of blessing has too increased. It will palpate more than comfy" natural Harlean Carpenter on Border district 5, 125-year Mayan calendar round, the wolves Fall behind their Appealingness and way inroads into the vaudeville circuit and was constantly an attractive fashion Demo.

Anonymous said...

Greetings from California! I'm bored at work so I decided to check out your website on my iphone during lunch break. I really like the knowledge you present here and can't wait to take
a look when I get home. I'm surprised at how quick your blog loaded on my mobile .. I'm not even using WIFI, just 3G .
. Anyhow, excellent site!

my web site; section 21 1 b notice

Anonymous said...

Great blog here! Also your web site loads up very fast!
What web host are you using? Can I get your affiliate link to your host?

I wish my site loaded up as quickly as yours lol

My page ... Section 21 Notice Form

Anonymous said...

I like the helpful info you provide in your articles.
I will bookmark your weblog and check again here regularly.
I'm quite sure I'll learn lots of new stuff right here!

Good luck for the next!

Feel free to surf to my web-site - .US93GFf7B0o

Anonymous said...

Hey there just wanted to give you a quick heads up. The words in your post seem to be running off the screen in
Firefox. I'm not sure if this is a formatting issue or something to do with browser compatibility but I figured I'd post to let you know.
The design look great though! Hope you get the issue fixed soon.
Cheers

Look into my site: Section 21 Notice

Anonymous said...

Greetings! This is my first visit to your blog! We are a collection of volunteers and starting a new initiative in a
community in the same niche. Your blog provided us valuable
information to work on. You have done a wonderful job!


my site :: Read More

Anonymous said...

Hello all, here every one is sharing such experience, thus it's pleasant to read this web site, and I used to visit this blog all the time.

Also visit my web-site :: Read More