Property Taxes

Last night, I watched a video of the newly elected governor of Anambra state, Mr. Charles, Chukwuma Soludo, talk about what he is going to do to transform Anambra state to an Eldorado. I waited patiently for him to tell us how he is going to generate the revenue for the infrastructure he plans to build. Indeed, the interviewer, BBC Igbo, asked him how he is going to generate the money to pay for the pie in the sky he was hoping to accomplish. The money the state gets from the federal government is not even enough to pay the salaries of civil servants hence many states owe their civil servants a year’s salaries. He talked to the effect that he has held high powered positions and know how to interact with the international community and get them to fund his projects. My God they have elected another idiot. If he were a seasoned leader and manager, he would have discussed how he is going to locally generate money to do what he needs to do. That would lead to a robust discussion of the diverse types of taxes, including, individual income tax, corporate tax, property tax, sales tax, value added tax and licensing, and floating bonds. In the next few days, I will put on my cap as a manager and teach him about how counties, states and governments in general obtain their money to fund their activities. Ozodi Osuji

PROPERTY TAX PROFOUNDLY CHANGES SOCIETY

INSTITUTE PROPERTY TAX IN NIGERIA

Ozodi Osuji

“The tax is levied by the governing authority of the jurisdiction in which the property is located. This can be a national government, a federated state, a county or geographical region or a municipality. Multiple jurisdictions may tax the same property.

Often a property tax is levied on real estate. It may be imposed annually or at the time of a real estate transaction, such as in real estate transfer tax. This tax can be contrasted to a rent tax, which is based on rental income or imputed rent, and a land value tax, which is a levy on the value of land, excluding the value of buildings and other improvements.

Under a property-tax system, the government requires or performs an appraisal of the monetary value of each property, and tax is assessed in proportion to that value.” Wikipedia

      Property tax means that if a man has land and or houses, he must pay annual taxes on them. Annually, the state property appraisers evaluate the market price of each land, house and tax the owner annually for it.

     The property owner must pay those taxes. If he no longer has the ability, money to pay the taxes the state takes possession of his property and sell it off. If he dies and his children cannot pay the taxes or do not want to live in the house or on the land, they sell the land/house to other persons.

      This way property, land and houses, may no longer stay in the same family for generations as they used to do in Europe.

      Property taxes decimated the ability of the aristocracy to maintain their houses across generations; they sold off their lands and houses.

     Nigeria should introduce property taxes on houses and lands; that way the rich pay taxes, money to the state to live in their houses and when they die if their children do not want to pay the taxes, they sell off the property.

     This way property tax would change the Nigerian society in a profound manner, as it did in Europe and North America.

    More importantly, property taxes are used to generate revenue with which most states in the USA fund their K-12 (kindergarten, elementary and secondary school) education.

      Money must come from somewhere to pay for county, state and country programs. Money does not fall from the sky.

     In the West there are many ways of generating revenue for the state, which includes annual income taxes (which could be as high as 33% of the individual’s annual income), Corporate/business taxes (which could be up to 33 % of business annual profits), sales taxes, (which could be up to 10% on every good bought in the state), licenses, Value Added Taxes, VAT, and other revenue streams.

     At present, Nigeria depends mostly on revenue from oil to fund its governments. This is unrealistic for oil is an exhaustible resource and soon will no longer be demanded by the West and that source of revenue dries up. The state should not put all its eggs in one basket; it must diversify revenue sources for the state.

    Nigerians, not used to paying taxes to generate revenue for their government, will, of course, oppose property tax, but they must be convinced to pay it and other taxes.

Ozodi Osuji

November 15, 2021

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