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The Land Use Act and equity factor in property taxation in Nigeria

Akintunde Otubu


Statehood imposes responsibilities on the government to provide security and welfare for its citizens. To meet these societal obligations, the state demand contributions from citizens in the form of taxation, based on some normative principles and acceptable standards. Taxes are imposed on persons and properties to defray the cost of governance amongst other uses. 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 legislations levying taxes on real properties. Given the foregoing, the paper examines the provisions of the Land Use Act on property tax in line with normative principles for levying tax, particularly the equity factor in taxation. The paper interrogates the powers of the governor to impose rents, review rents, and enforce payment of rents under the Act. It also discusses the implications of the administrative structure and penalties for non-payment of rents under the Act. Using a doctrinal research methodology, the paper finds the provisions of Land Use Act on property taxation as unrepresentative, draconian, inequitable and unjust. The Act gives the governor unfettered discretion in tax management, provides harsh and inequitable penalties on tax defaulters, does not provide any tax adjudicatory system and fails to capture the whole taxable properties within the tax net, amongst others. The paper recommends a review of the tax policy under the Act to capture all taxable properties, ameliorate the harsh tax penalties, provide a tax appeal system and curtail the unfettered discretion of the governor under the Act.

Keywords: Taxation, Property Tax, Land Use Act, Tax penalty, Tax Administration