AN EVALUATION OF PROPERTY RATING PRACTICE IN NIGERIA
- BACKGROUND OF THE STUDY
The Urban property rating is potentially an attractive means of financing municipal government in developing countries. As a revenue source, it can provide local government with access to a broad and expanding rating base. In contrast to the mix of intergovernmental grants and indirect rating that now dominate local government revenues. It can also promote broader efficiency objectives linking the provision of municipal service more closely to their financing and rating the consumption of municipal services by the price.
At present, however yields of urban property rates in developing countries are extremely low. Its contribution to total public sector rates is negligible, and its share of municipal revenues is typically less than 30 percent.
In part these low yields reflects failure in the administration of the property rates to an extent these administrative failure can be include improved property rate base coverage valuation reliance on the judgement of valuers and provide incentive to agencies responsible for the rate administration.
Recent experience nevertheless shows that indexing valuation can be maintaining the real levels of property rate during periods of inflation. To maintain the real level of rate liabilities, rating authorities must either revalue annually or increase nominal rates. Annual field revaluations are too expensive and annual rate increase are too politically controversial. Hence, the problem could be addressed by adjusting valuation from the office” on the basis of common inflation indicators. The World Bank expert, William Dillinger (1992) suggested that the solution should be more widely adopted.
This paper shows that the property rate in Nigeria is an underutilized revenue source for local authorities potentially; property revenue could be increased by 60 percent through effectively improving four critical ratio of coverage valuation tax rates and collections. Improved property rate revenue could contribute critical resources necessary to enable local authorities to provide the level and quality of services required to sustain and promote further economic and social development in Nigeria.
The breadth of international property rate experience provides an opportunity for Nigeria and other developing countries to learn and adapt the key lessons to the unique legal political, economic, social and institutional environment in their countries.
However , the first step in an property rate reform effort is to undertake a though analysis of the existing property rate system, identifying the major constraints and opportunities for improvement. Based on this analysis, an appropriate reform strategy must be designed, focusing on the policy and administrative dimension as well as the implementation strategy itself.
Properly rating is employed in Nigeria at the local government levels to raise revenue 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 status without restriction and for all times.
The general lack of interest on the part of the property rate payers and the reluctance of some assessment jurisdictions to disclose information, the property rate administration are often surrounded in mystery.
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 b 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.
From the investigation and empirical data on property rating in general in Akwa Ibom State in particular one observes a gold. Mine with proper handling waiting to be exploited as can seen in Akwa Ibom State it is therefore the aim of this paper to examine an evaluation 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 appraised of the system.
The purpose of this paper is to study and identify the prospect of site value rating as a means of boosting the local government finance.