AN EVALUATION OF PROPERTY RATING PRACTICE IN NIGERIA (A CASE STUDY OF ENUGU NORTH LOCAL GOVERNMENT AREA)
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AN EVALUATION OF PROPERTY RATING
PRACTICE IN NIGERIA
(A CASE STUDY OF ENUGU NORTH LOCAL
GOVERNMENT AREA)
ABSTRACT
In writing this
thesis, I have been afforded an opportunity to put in writing my views about AN
EVALUATION OF PROPERTY RATING PRACTICE IN NIGERIA (A CASE STUDY OF ENUGU NORTH
LOCAL GOVERNMENT AREA) of Enugu State. This thesis has been planned in such a
logistic and sequential pattern to give the reader a general clue of property
rating practice and how it operates Enugu North local government area
particularly.
Chapter One: This captioned the Introduction. The particular chapter gives the
overview of the whole paper ie. What the reader is expected to arrive at after
reading the entire essay.
Chapter Two: This dealt with a review of related literature in property Rating;
Tenement Rating Assessment; method of rating valuation; Appeal machinery and
their procedures.
Chapter Three: Examined the Research methodology and design. Also presentation
and analysis of data used in this research work.
Chapter four: Focus on the history of the case study and problems and
constraints of property rating in the case study area.
Chapter Five: Finally chapter five presents the findings, recommendations and
conclusions. The researchers perspective from findings, The recommendation is
for future prospects of property Rating in Enugu North Local Government Area of
Enugu State in particular and conclusion is for the entire paper.
TABLE OF CONTENTS
CHAPTER ONE
1.0
Introduction
1.1
Background of Study
1.2
Statement of the Problem
1.3
Objective of the Study
1.4
Scope and Limitation of the Study
1.5
Research Question
1.6
Definition of Important Terms
CHAPTER TWO
2.0
Historical Background of Property
Rating in Nigeria
2.1
Tenement Rating Assessment
2.2
Exemptions and Relief’s
2.3
Methods of Rating Valuation
2.4
Preparation and Publication of
Valuation List
2.5
Appeal Machinery
2.6
Collection and Enforcement
2.7
Undesirable Practices in Rating
Administration
CHAPTER THREE
3.0
Research Methodology
3.1
Sources of Data
3.2
Method of Data Collection
3.3
Presentation and Analysis of Data
CHAPTER FOUR
4.0
History of Your Case Study
4.1
Tenement Rating Assessment in the Cast Study Area
4.2
The Rating Department
4.3
The Administration of Property Rating
in the Case Study Area
4.4
Problems and Constraints of Property
Rating in the Case Study Area
CHAPTER FIVE
5.0
Summary of Findings
5.1
Recommendations
5.2
Conclusion
Bibliography
CHAPTER ONE
INTRODUCTION
The
creation of more state in Nigeria in 1976 gave rise to new urban centres, the
rapid growth of which increased the need to finance the provision of public
utilities. One of the major sources of finance is real estate taxation.
Property tax reform is one of the alternatives proposed as a means for raising
increased revenue to meet the financial needs of cities in less developed
countries. Property rating is employed in Nigeria at the local government
levels to raise revenues for public purposes. Rates are levied not on the
nation as a whole but on a particular locality that is deemed ripe for the
imposition of rates and with the consent of parliament. This consent is not
given on every occasion of rate collection. The power is general one, given by
statute without restriction and for all times.
The general lack of interest on the part of the property ratepayers and the
reluctance of some assessment jurisdictions to disclose information, the
property rate administration is often surrounded in mystery. This centres on
the fact that the core of property tax (rate) administration is the value of
each taxpayer’s property, so that each taxpayer will bear fairly his
proportional part of the overall tax levy. Property owners have a right to know
the approximate, fraction of estimated market value that is being used for tax
(rating) assessment purposes.
If the local government have to exist and to viable as the third tier of government
they must surely need some local revenue in order stand firmly property rating
is the most obvious source of such revenue. Property rating not only helps in
influencing development but is also the major source of local government
revenue used in defraying the cost of services rendered by local government
includes, inter-alia, parks, burial grounds, registration of marriage, death
and birth.
It is important to note that rate is a form of tax, hence the use of property
rate and property tax is interchangeable, although there is a slight difference
between rate and tax, beside that rate is a form of tax, while in rating the
amount of revenue required by a rating authority is first decided and then
distributed among the rate payers according to a pre-fixed standard in other
kind of tax the exact amount to be generated at the time of imposition is
unknown.
1.1
BACKGROUND OF STUDY
From
investigation and empirical data on property rating in general and in Enugu
state in particular, one observes a gold mine with proper handling waiting to
be exploited as can seen in Enugu north it is, therefore the aim of this paper
to examine the administration of property rating in the state, how well
informed the rate payers are, their attitudes, improvement in the system, how
well the system has been paying off, and of course, a critical appraisal of the
system.
The
purpose of this paper is to study and identify the sources of local government
finance, its problems, methods of property assessment as provided in some
rating laws/Edicts, the impact of control of rent edict on property assessment,
prospects of property rating and make recommendations not only on how best to
expand the local government financial base with particular reference to
property rating system but also on how best to implement the rating in the
country. The purpose also includes the prospect of site value rating as a means
of boosting the local government finance.
1.2
STATEMENT OF THE
PROBLEM
The
local government reform law gave the function of rate collection to the local
authorities. The valuation unit in the old Anambra State was staffed by civil
servants. The unit organized tenement rating and prepared valuation list which
were after due procedure sent to the rating authority to serve demand notices
and collect tenement rates.
One
of the greatest rating problems in most rating authorities is the problem of
collection. The weak or ineffective administration has resulted in a high rate
of default. For example in 1978/79 in the whole of Enugu north 21% of the
estimated rate revenue was collected. Some rating authorities are now embarking
on a commission basis.
The
question of prosecuting defaulters is not actively pursued in most local rating
authority areas for two reasons:
(a)
Most of the defaulters are the élites
who will adjudicate such cases.
(b)
For political expediency landlords are
political power brokers who chairmen of local rating authorities would not like
to embarrass by prosecution.
Part
xiii of this Edict captioned “Rating” which includes sections 103 to 146
empowers a local government area, in other words, a rating areas to impose
property rating on property owners as a source of revenue raising. In Enugu
state in general, and Enugu North local government in particular, weaknesses
are readily discernible in the present property rating structures which in
retrospect, prevents successful implementation of their service. Most of the
property rating administrators at the local government headquarters is mere
technicians, others basely literate which in no less measure hamper their sense
of judgments as per the nature of the properties they collect data from, to be
used by the rating valuers in the ministry of local government as Enugu, to
arrive at the annual values of the properties. This problem was aggravated
during the political era when employment opportunities were nation on political
rather than qualification basis.
In
collation with this, most property owners in Enugu are illiterates and do not
know their rights. Most of them do not know why they should pay property
rate at all. Added to this ugly situation is the ambiguity mounted by the
assessors (valuation officers) in their notice to the property owners
indicating the assessed value thereof. They only show the assessed annual value
with out signifying the actual rate payable. When most of landlords see these,
they simply deafen their ears, and blatantly refuse to pay, misconstruing the
annual value as the rate payable value. They are only brought to attention of
this premise by litigation, which is not the best interest of the local
government, the cost and time consummations.
Another
factor is how to equate the rating burden of the property owners in the
locality with the value of services provided by the government activity.
Implicit in this problem is the question of how to improve the current
deplorable situation and weakening rural development programs via sound
administration of property rating revenue.
1.3
OBJECTIVES OF THE STUDY
The
main objective for the introduction of property rating in the local government
is to raise revenue from the source. Revenue, thus generated are utilized by
the local government where the tenements/properties are located to provide
essential service which the government grants cannot easily take care of.
Local government provides essential services such as the supply of water and
electricity, repair of wads and bridge, supplementing of the government grant
for the payment of staff salaries not employed by the government. They also,
have the responsibility to provide good drainage system and the planning of
their local government area.
It
is a fact that no government could long exist without the power to levy and
collect taxes.(Barlowe.R)goes on to contend that the power to tax is the one
great power upon which the whole national fabric is based. It is necessary to
the existence and prosperity of the nation as the air he breathes is to the
natural man. Thus the taxing power provides government with the major portion
of revenues they use to finance their many operations and function, and it also
provides a tool they can use for various fiscal and regulatory purposes.
1.4DEFINITION
OF IMPORTANT TERMS
A)
PROPERTY RATING: Also known as local government value of
property paid to local government coffer as an amount per naira of the dateable
value of the property. It is a local government tax based in rates, which are
levied on the basis of ratable values of properties.
B)
RATE: Payment for the ownership or occupation
of something valuable, that is, rate is payment for the benefit derived or
derivable from services.
C)
RATEPAYERS:
Ratepayers are the property owners whose properties are ratable. The word may
refer to occupiers of the property or agents of the property owners
especially where the property owners is an absence landlord.
D)
RATING AUTHORITY: Means
a rating area or a local government charged with the powers to administer
property rating. Where used in this write-up, it applies to Enugu north local
government.
E)
LOCAL GOVERNMENT
FINANCE:
Is the management of inflows of money
by the government, that is the obtaining (of income) and using (or expenditure)
of fund.
PROPERTY
RATING ADMINISTRATION
Property rating administration embraced the four board principal arms involved
in property rating namely the assessment, the collection the payment, and the
application machineries.
OWNER:
Includes the person for the time being
receiving the rent of the tenement in connection with which the word is
used whether in his own account or as agent of, or trustee for any other
person, or who would receive the sum if such tenement were let to tenant, and
the holder of a tenement direct, from the state whether under lease, license or
otherwise.
PROPERTY:
The meaning of property varies not only among individuals but also among
professions. T o Estate surveyors and valuer and in fact in legal sense,
property consist not of object but of rights over or in things owned. In other
words, property consists of rights which owners exercise over land which they
posses. These rights are
(a)
Rights of
use
(b) Right of ahenate
(c)
Right to claim title
to
(d) Right of assimilate, and
(e) Right to pass by succession. These rights
are referred to as “bundle of right” or property power.
RATE
NAIRAGE: Means
the amount in kobo to be charged on each naira in the assessed ratable value.
It is currently 10k (ten kobo) in Enugu State.
STATE:
State here means Enugu State.
LOCAL
GOVERNMENT: “local government”
where used in this thesis implies the Enugu North Local Government Area of
Enugu State.
APPRAISER:
In relation to rating is essentially a
valuer appointed to assess the value of hereditaments in the rating authority
area.
HEREDITAMENT:
Means any land, tenement or property
which are or may become hable to any rate in respect of which valuation list is
by the rating Act made possible. In other words, it is any tenement included in
the variation list.
SPOT
VALUE:
Means the amount at which a scheduled
tenement is ratable.
RATING
AREA: Means
the area of operation of any rating authority. Every local government area is
by section 99 of the local government edict made a rating area.
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