This is in reference to a recent call for a reformed tax administration that would harmonise collections and end multiple taxations, thus ushering in a friendlier environment created by all tiers of government.
The FCT Administration has said it is assiduously working on streamlining and simplifying the regulations and procedures for Property Registration and Land Use planning.
Taxes are imposed on persons and properties to defray the cost of governance among other uses and property tax is one of the major sources of government revenue and includes taxes on real property.
In Nigeria, the Land Use Act imposes tax on landowners/users, outside other legislation levying taxes on real properties.
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Thus, rating is ordinarily defined as a form of local tax levied on properties within a defined area to fund local services.
A tenement is a hereditament which is an estate that has a definition and is a legal concept. Every property that can be occupied is a hereditament and this generic term gives rise to what is called tenement rate.
There are other kinds of land-based taxation. There are different taxes to every type of property. The federal government has its own type e.g., some incomes in particular properties are VAT-able, and VAT is a federal tax.
As for the state government, the income accruable to landlords, not corporate bodies, such incomes are taxable by the state government whereas for the local governments, it is ad valorem i.e., based on value.
State governments have some sort of control over their local governments, and we have the joint account system, perhaps the state governments could harmonise their taxation.
However, the constitution provides that the state government has to legislate on how tenement rates shall be administered in their states by the local governments so LGs cannot just administer tax without appropriate legislation by the state governments.
The owner of a property is liable to be taxed from the income of that property, corporate organisations like limited liability companies that own properties, incomes from such properties are subject to Value Added Tax (VAT), which is a federal tax. For the LGs, it is based on the annual value of their properties.
But the fundamental fact remains that any tax or rate that is ad valorem, any tax that requires a certain percentage to be paid on value, then the estate surveyor and valuer is critical in such a process because values can only be determined by them.
The Nigerian Constitution provides that tenement rate is exclusively for the local government; state governments have nothing to do with it.
Every government has its strategic role to play regarding taxes; some abandon their statutory function into other roles that are not theirs. Example is the Land Use Charge that Lagos State came up with to harmonise all land-based revenue into one basket and is applicable.
In that one basket you have tenement rate, income tax, all sorts of levies and from all these they share that revenue. Many LGs cannot challenge this because of the politics involved.
Nigerian estate surveyors and valuers no doubt have the numbers and the capacity to perform valuation for tax purposes, example if the FCT where AMAC has pursued tenement rate. And it took about 23 estate surveyors and valuers to value all AMAC properties that led to the current Valuation List being used presently.
Esv. Adamu Kasimu is an Abuja-based Estate Surveyor and Valuer