Taxation professionals under the auspices of the Chartered Institute of Taxation Nigeria (CITN) have warned the Federal and other tiers of government against hiking property tax rates in the country.

According to them, hiking property tax rates would only push house rents to the rooftops and cause Nigerians residing or doing business in other people’s houses more pain even as it does not guarantee government significant improvements on revenue collection.

The experts also saw no direct relationship between hiking property tax rate and elimination or reduction in the rate of corruption across the country.

The President of the institute, Mr. Mark Anthony Dike, made the position of the institute and his colleagues known at the 2013 induction of newly qualified taxation professionals as full members of the institute in Lagos recently.

He noted that a similar law has been successfully implemented in some countries but expressed doubts over the workability of this new property tax law in the country.

“There had been several agitations from some quarters for an upward review of property tax. This call, though, seems good on the surface but definitely not the major solution or panacea to the problem of insufficiency of revenue or eradication of corruption, which has eaten deep into the fabric of the Nigerian system.

“This property tax law was successfully implemented in countries like Egypt and Greece but there are serious doubts on the part of the public on government’s ability to fully execute such policy in Nigeria,” Dike said.

According to him, contrary to the expectations of proponents of hike in property tax, the hike cannot generate significant additional income for government and it cannot discourage corruption and flaunting of ill-gotten wealth in the country.

“Proponents of property tax believed that it should be imposed not only to raise more revenue for government but also to serve as a veritable instrument to checkmate corruption and the flagrant showcasing of ill-gotten wealth by some individuals.

“Good as this argument might be and without being pessimistic, we know that the Nigerian political structure and agencies as being presently constituted would frustrate the implementation of this tax. We are aware that there is a pending bill on this in the National Assembly, which is experiencing serious opposition by vested interests”, he added.
The CITN boss also reminded those pushing for the hike that “most private estates in Abuja remained inhabited after several years of completion because of the high rent being demanded by the owners.”

The above, according to him, were some of the negative implications of the implementation of property tax. “The burden would, as expected, be ultimately transferred to the tenants,” Dike stressed.

He observed that relevant government agencies at the Federal Capital Territory (FCT) Abuja refused to collaborate with the Federal Inland Revenue Services (FIRS) in the administration of property tax in the region.

“Government should not only have the transparent will to enforce it but should also ensure that all relevant agencies involve in its implementation work hand-in-hand,” he advised.

“It is therefore not enough to pass the property tax law; Government should overtly exhibit the will-power not only to implement it but also to ensure that there is an unhindered, untailored and unmonitored exchange of information amongst relevant government agencies.

“The Abuja Geographical Information System (AGIS) should be willing and ready to work with the Board of Internal Revenue, if eventually established for the Federal Capital Territory, in the provision of updated information while the appropriate vehicle and property registration agencies must be willing to share information with revenue agencies in order to be able to identify and sanction tax evaders appropriately,” Dike said.

Meanwhile, the institute has admitted the 548 newly qualified people into the membership of the institute in line with provisions of the CITN Act, 2004, which charged it with the responsibility of determining the standards of knowledge and skills to be attained by persons seeking to become a tax practitioner and administrators in the country.

2013-12-02