Key Features:
No of Page: 100
No of Chapter: 5
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Tables
Abstract:
This research work focused on the examination of the problems and prospect of land use charge administration in Enugu state. The main objective is to critically examine the problem and prospect of land use charge administration in Enugu state. Data was collected through a questionnaire developed by the researcher which consisted of seventeen (17) items. The instrument was validated by the project supervisor. After the validation, an instrument of seventeen (17) options emerged. The projected population of the study is 873 which is the projected population of land/property owners, Estate surveyors and valuers, land use charge tribunal members, land officers and staff of ESIRES (LUC Dept.), sample size of 444 was gotten through YaroYamanne’s formula.
Out of 444 questionnaire distributed to the respondents,115 copies were not returned, hence the researcher worked with valid 329 questionnaires returned. From the analysis it could be summarized that land use charge administration has not been effective in Enugu state, also, land use charge is high coupled with lack of proper management, it was equally deduced that the problems militating against efficient and effective land use charge administration in Enugu are inconsistent land use charge , administrative incompetency, cost of management, governmental policies and personnel ideology. More so, the study reveals that land use charge creates revenue, promotes effective and efficient land use, serve as an instrument of growth and generate income. The researcher recommended that there is need for all the relevant land administrators to proffer solution to all the identified problems listed above which will go a long way in enhancing the land use charge management in Enugu state and Nigeria at large
Table of Content:
Cover page i
Tittle page ii
Approval page iii
Dedication iv
Acknowledgement v
Table of contents vi
Abstract vii
LIST OF TABLES
Table 4.1 Introduction of base data 68
Table 4.2 age distribution of respondents 70
Table 4.3 educational qualification of respondents 70
Table 4.4 effectiveness of land use charge administration 71
Table 4.5 Level of compliance to land use charge 71
Table 4.6 Level of management of land use charge administration 72
Table 4.7 Need for review of land use charge administration 72
Table 4.8 efficient and effectiveness of land use charge administration 73
Table 4.9 Competency of land use charge administration 74
Table 4.10 Management cost of land use charge administration 74
Table 4.11 Effectiveness of government policies 75
Table 4.12 Effectiveness of personnel ideologies 75
Table 4.13 Land use charge creates revenue for the government 76
Table 4.14 Effectiveness and availability of land use charge administration 76
Table 4.15 Land use charge as an instrument of development in the state 77
Table 4.16 Land use charge generates income to the state 78
Table 4.17 Maintaining a consistent trend in land use charge administration 78
Table 4.18 Competent workers should be employed 79
Table 4.19 Cost of management should be reduced 79
Table 4.20 Government policy should be checked 80
Table 4.21 Hypothesis one 81
Table 4.22 Hypothesis two 82
CHAPTER ONE
1.0 INTRODUCTION 1
1.1 Background of the Study 1
1.2 Statement of the Problem 5
1.3 Aim of the Study 8
1.4 Objective of the Study 8
1.5 Research questions 8
1.6 Research hypothesis 9
1.7 Significance of the Study 9
1.8 Scope of the Study 10
1.9 Limitation of the Study 10
1.10 Overview of the Study 11
CHAPTER TWO
2.0 Review of related literature 13
2.1 Concept and meaning of taxation 13
2.2 Objectives of taxation 18
2.3 Cardinal doctrine of taxation 19
2.4 Characteristics of taxation 22
2.5 Land based taxation 27
2.6 Evolution of property rating in Nigeria 30
2.7 Functions of the local government 34
2.8 Land use charge 35
2.9 Theories of taxation 53
2.10 Review of related empirical study 55
2.11 Summary of review related literature 58
CHAPTER THREE
3.0 Research methodology 59
3.1 Research design 59
3.2 Re-statement of the problem 59
3.3 Brief discussion of the study area 60
3.3 population of the Study 63
3.4 Sample size and sample techniques 63
3.5 Instruments for data collection 66
3.6 Method of data collection 66
CHAPTER FOUR
4.1 Data presentation 68
4.2 Presentation of base data 68
4.3 Hypotheses of the study 80
4.4 Discussion of result 82
CHAPTER FIVE
5.0 Introduction 84
5.1 Summary findings 84
5.2 Conclusion 84
5.3 Recommendation 85
5.4 Suggestion for further studies 85
Reference 86
Appendix 90
Introduction:
Taxes have been known to man since the ancient times. The origin of taxation can be traced to primitive civilizations. It was there that man first began to provide through government for services he could not provide himself. And it was there that he began his long and sometimes tragic search for the means to pay their cost. In Athens in 596 BC, land and tangible personal property were taxed. The produce of agricultural land has always been an easy measured form of wealth. Taxation is a two pronged fork as it encourages government to raise revenue for the development of wards, provision of portable water, electricity and also for funding housing, while on the other hand it tends to discourage private developers as they have to pay several property tax in other to own a home.
Poll is the easiest form of tax to be assessed. This is because everybody pays equal amount and with this some members of the community would be paying the maximum they could afford to pay while others who could afford to pay more pays more. For this, defect it has have been necessary to adopt a method of property taxation that takes into account a person’s ability to pay. Such a system is called RATING. Property rating has had a long history in the United Kingdom dating back to the Statute of Sewer enacted about 470 years ago or even arguably further back to 1188 AD when the Saladin Tithe was imposed by Henry II. However, in the 12th century in England, different taxes were levied on real properties and not just on land. During the next several hundred years, taxation drifted into just a land tax. Nevertheless, there was no systematic, rational system in England to which the early Colonies and the United states could look to with the exception of the Poor Relief Act established in England in 1601.This law took into account the ability to pay and this became the basic premise of the new England tax structure. At the earlier state the area of land owned by a rate payer was used as a measure of his ratable liability.
The rating system in Nigeria is derived from British law. The Poor Relief Act of 1601 which is often referred to as the statute of Elizabeth and regarded as the foundation of the present rating system both in U.K and Nigeria. The Act was enacted when there was high destitution in England as a result of the abolition of monasteries by Henry VIII in 1601. To solve this problem therefore some institutions were established to take over responsibilities that the monasteries have been undertaking for centuries and this led to the provision under the Act for “Overseers of the poor” to be appointed for every parish. The Act was comprehensive but no basis of assessment was laid down in the Act. One problem with the Poor Relief Act was that it provided for rating stock –in –trade, wages and salaries which were difficult to assess and which are not even real properties. This was however corrected by the Poor Rate Exemption Act of 1840. Four (4) years earlier however, the Parochial Assessment Act of 1836 was enacted to correct the omission in the statute of Elizabeth by prescribing definite basis of assessment. The Act provided that properties must be rated on the basis of their Net Annual Value (NAV).The Union Assessment Committee Act of 1864 also made some improvement in property rating by establishing assessment committee that will be charged with supervising valuations within a union of parish. The original Assessment was enacted on May 1915 and was later amended to include rating of improved value. Today state Law and Edict modeled more or less on the 1958 Act that forms the basis of rating in many states of the federation.
At first there were:
(a) The Assessment Law of Lagos
(b) Laws of Northern Nigeria 1963
(c) The Laws of Western Nigeria 1963
(d) The Laws of Eastern Nigeria 19t63
With the creation of more states in Nigeria in 1967 each state has to make their own laws as at when necessary. The East Central State of Nigeria adopted Cap 11 of the Laws of Eastern Nigeria 1963 for property rating as amended by:
1. The Assessment (amended) Edicts NO 8 Of 1972
2. The Property Rate Edict No 9 of 1972
3. The Assessment Law Amended Edict No 6 of 1973
4. The Property Rate Ordinance No 10 of 1973
5. The Control of Rent Edict No 4 of 1975
The Enugu State Land Use Charge Law came into force on the9thday of August, 2016 and has twenty-eight sections and later amended in 2017. The law, which is now being enforced established that a land-based charge is payable on real properties situate in Enugu State, Nigeria with each local government area empowered to levy and collect the charge for its area of jurisdiction as collecting authority. Each collecting authority may delegate to the State, by written agreement, its functions with respect to collection of rates and the assessment of privately-owned houses or tenement for purpose of levying the rate.
Land use charge is a form of taxation, whose objective is to increase the generation of internal revenue for financing public spending. According to Harvey (2000), it is a tax levied on property and its basis of assessment could either be, Net Annual Value (NAV), Capital Value or Site Value. Oni (2010) expressly stated that the tax is based on an annual income obtainable from a property and not on capital value in the case of income that is receivable in perpetuity. It is also based on profit rent in the case of income receivable for limited period. Accordingly, land use charge as a form of taxation is expected to be fair and equitable; set in simple clearly understandable language; consider the ability of an individual to pay based on income; politically acceptable to the payers to avoid incurring hostility; and consistent with goals of promoting stable economy (Kuye, 2002; Ogbuefi, 2004).
The migration of people from the rural areas into cities such as Lagos, Enugu, Abuja, and Port Harcourt impose adverse challenges on the available infrastructures, whereas, funds allocated for improvements in these areas are far from being enough for managing them. Sequel to the rapid population growth and decrease in available funds, the standard of maintenance of public infrastructure was reduced to the barest minimum.
There have been concerted efforts by all tiers of governments in Nigeria to increase internally generated revenue bases through various forms of taxes on land and landed properties. This problem which is most pronounced in Enugu State, has influenced the action of the State government to eliminate multiple taxes imposed on residents through the enactment of Land Use Charge Law. The main objective of the law by the Enugu State Government is to generate additional revenue needed to enhance the standard of the state in terms of physical and social infrastructure (Oserogho, 2002).Based on foregoing, this research seeks to assess the administration of Land Use Charge law in Enugu State with a view to enhancing government revenue without unduehardship on the tax payers.
1.2 Statement of the Problem
Enugu state land use charge was promulgated to make provision for the consolidation of all properties and land based rates and charges payable under the property rate law, Assessment law and Local Government law in Enugu State but the above mentioned Law tempered with the constitutional functions of the local government even though it expressively recognize Section 1(1) of the Fourth Schedule of the 1999 constitution (as amended) that gave property rating to the local government council. The section 3(3) of the law under study clearly stated that the local government council may delegate in writing its assessment and collecting authority to the state. One may wonder if the local government can withstand the pressure of the state government by not delegating its power in this regards as the state electoral commission conducts the local government council election.
Another problem is its failure to categorically repeal all the existing laws it purport to consolidate. Section 24 of the law under study stated that on and from the date when the Land Use Charge is levied on a property in accordance with this law, the provision of assessment law and any amendment made pursuant thereto shall cease to apply to the property. The implication being that any local government that does not want to delegate its assessment and collection function can still go ahead and carry out its constitutional function by using the other laws namely the Assessment Law Cap 11 of 1991 and property Rate law Cap .108 of 1991 and any amendment made thereto which are not expressively repealed. It then means that the state government will consolidate the consolidated rate by assessing and collecting only the ground rents and infrastructural and maintenance levies from the chargeable properties in that local government area.
Another great challenge of Land Use Charge Administration in Enugu is poor assessment machinery. Some neophytes in land use charge assessment would just come up with baseless and arbitrary figures as tax liabilities to individual. This scenario runs counterproductive in tax administration where the best of judgment is used. This is why there was an over assessment done in 2018 administration of land use charge in Enugu State, such that the State Governor approved the reduction in the Land Use Charge assessed value that could have been paid by tax payers to only 50% of the assessed value.
Another visible problem is the mechanism or formula for computing the Land Use Charge (LUC= Mx (LA X LV)x (BA X BV X PCR)). This formula for the assessing landed property for the purpose of land use charge defies logic. Tax avoidance and evasion in Enugu State has its own toll on land use charge administration in the state. This is a fraudulent, dishonest and intentional concealment or distortion of facts and figures with the intention of avoiding the payment of or reducing the amount of tax otherwise payable. Tax evasion is a criminal offence and may have accounted for why government is not able to collect most of this tax as at when due. Another great challenge of land use charge administration in Enugu is over assessment by some neophytes in the Ministry of Land and Urban Development who uses baseless and arbitrary figures as tax liabilities to individual. This underscores the point why Land Use Charge was introduced by Enugu State Government to raise revenue for maintaining existing infrastructure and provide new ones. It is in line with this that this research project work is set to critically examine the prospect and problems of land use charge administration in Enugu state and come up with recommendations to assist Government and tax-payers.
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