Global Journal of Management and Business Research: B

Economics and Commerce

Volume 21 Issue 2 Version 1.0 Year 2021
Type: Double Blind Peer Reviewed International Research Journal
Publisher: Global Journals
Online ISSN: 2249-4588 & Print ISSN: 0975-5853

An Assessment of the Impact of Land Taxation on Land

Resources Development in Ogun State Nigeria
By Orekan, Atinuke Adebimpe
Bells University of Technology
Abstract- The study examined the impact of land and property based taxation on land resources
development in Abeokuta South, Ogun State. The objective is to identify the significant impact of
property taxation on land resources development in Abeokuta South and the effectiveness of it in
the study area. A quantitative approach was adopted in this study, using questionnaire and a
semi structured interview as an instrument for data collection. Seventy-five (75) number
questionnaires were administered to valuers in Fifteen (15) Estate Practicing firms in Abeokuta
South LGA, while interview was conducted amongst four (4) senior cadre staff at the lands
department, in the Bureau of lands and survey. The study revealed that 50% of the respondent
which represents the average, opined that the impact of land and property based tax on land
resources development is at a low extent. Ignorance on the part of tax payers and government
and corrupt practices have been identified as the major cause of the low impact.
Keywords: land and property, taxation, land resources development, abeokuta south.
GJMBR-B Classification: JEL Code: R30

AnAssessmentoftheImpactofLandTaxationonLandResourcesDevelopmentinOgunStateNigeria

Strictly as per the compliance and regulations of:

© 2021. Orekan, Atinuke Adebimpe. This is a research/review paper, distributed under the terms of the Creative Commons
Attribution-Noncommercial 3.0 Unported License http://creativecommons.org /licenses/by-nc/3.0/), permitting all non -commercial
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 An Assessment of the Impact of Land Taxation
on Land Resources Development in Ogun State
Nigeria
Orekan, Atinuke Adebimpe

Abstract- The study examined the impact of land and property According to Oyedele, (2016), he opined that the
based taxation on land resources development in Abeokuta primary aim of any government is to provide an enabling

2021
South, Ogun State. The objective is to identify the significant environment for the people through ensuring that there
impact of property taxation on land resources development in is adequate security, giving hope to the downtrodden

Year
Abeokuta South and the effectiveness of it in the study area. A
and providing succor to the vulnerable. Government is
quantitative approach was adopted in this study, using
questionnaire and a semi structured interview as an instrument the body that is constituted or put in place by the people
23
for data collection. Seventy-five (75) number questionnaires to provide a level playing ground for every resident. For
were administered to valuers in Fifteen (15) Estate Practicing government to achieve all of these, land which is a

Global Journal of Management and Business Research ( B ) Volume XXI Issue II Version I
firms in Abeokuta South LGA, while interview was conducted major asset of any nation should be under a suitable
amongst four (4) senior cadre staff at the lands department, in administration and management.
the Bureau of lands and survey. The study revealed that 50% Land and its appurtenances are controlled by
of the respondent which represents the average, opined that governments because they are basic to wealth creation
the impact of land and property based tax on land resources and are seen by everybody as a basic need. It is the
development is at a low extent. Ignorance on the part of tax
medium that generates the basic needs of man: food,
payers and government and corrupt practices have been
identified as the major cause of the low impact. It is
housing and clothing and it is the base for other living
recommended in this study that the inconsistency in activities, social interaction, education, transport, health
governments at both local and state level, lack of human etc. To ease government’s ability in providing the
capacity to efficiently manage land-based taxes and over- needed social and economic infrastructure such as
dependence of government on non-land-based incomes like education, transport and health, citizen of every nation
natural resources should be given adequate attention and needs to contribute and support government through
addressed. tax payment. Land tax can then be referred to as a
Keywords: land and property, taxation, land resources recurrent tax on the ownership of undeveloped or
development, abeokuta south. developed land, excluding any development made on
land (Franzen and Mc Clucskey 2017). Land taxes can
I. Introduction
be classified into two: Property tax and Land charges.

I
t is widely accepted that a country’s potential for Examples of land charges are ground rent, land use
economic development is largely influenced by its real charges and fees such as: survey, registration and
(physical) estate resources endowment (de soto, search, valuation, application, application, re-grant,
2000). Land is the main natural resources, and it change of purpose and occupancy permit. Property tax
constitutes the collective assets of a nation and its is a charge levied compulsorily on interest in ownership
citizens. The health and wellbeing of every nation to a and use of landed properties. This includes: tenement
large extent is a reflection of the efficient management of rate, probate tax, capital gains tax, capital transfer tax,
its real estate resources. Land based taxes often forms stamp duties, withholding tax, severance tax,
bulk of government revenue which relates to monies betterment/development tax and site-value tax. It is a
mobilised from real estate resource base in the major avenue for realising income for local and state
economy. Generally, resources of government come authority. This revenue can be for government to bear
from revenue generation and this can be from external the cost of providing and maintaining social services.
or internal sources. Land taxation’s role has also been recognised
One of the major roles of government of any as a main drive in the reinforcement of domiciliary
nation is to cater for the welfarism of the people. This resource mobilisation and thereafter to look for ways of
which include the economic and environmental extending the tax base and enhancing tax governance
development of the people through efficient (Atta-Mills 2002, Teidi 2003 and Oloyode 2010). This
management of man-made and natural resources. means that the resources from land such as taxes is
Author: Department of Estate Management, College of Environmental often used in financing of urban infrastructure and if so,
Sciences, Bells University of Technology, Ota, Ogun State. it has impacts on the fiscal and non-fiscal policies. It is
e-mail: [email protected] therefore, not out of tune, for governments all over the

© 2021 Global Journals

 An Assessment of the Impact of Land Taxation on Land Resources Development in Ogun State Nigeria

world, to develop and improve the land resources of the II. Literature Review
states and manage them effectively for the benefits of
a) Concept and Nature of Land and Property Based
the generality of the people.
Taxes
Families in advanced world relied upon local
Land-based taxes are the charges, levies, rates
governments for sustenance and development of their
and rents paid on land, (either developed or
areas. Benton (2009) states that the last tier of
undeveloped) to governments for income generation
government (local governments) are the most
and wealth redistribution. It also served as a form of
numerous, pervasive and relied upon of the family of
government control over land. It is the responsibility of
governments in the United States. The provision and
land-owners to pay taxes on them and it is the duty of a
maintenance of infrastructure depends on the resources
responsible government to collect taxes on land and its
and income mobilised at the local government and this
appurtenances as at when due.
cost a huge amount of money. He further revealed that
The Food and Agriculture Organisation (FAO)
2021

in 2002, the summation of expenditure in countries, local

(2002) defines property tax as an annual tax imposed on
government areas, towns, special districts and school
real property usually by reference to an advalorem tax
districts measured up to $1.14trillion and as at 2017 the
Year

base (i.e., the tax is calculated according to the value of

total US government spending is $13.16 trillion. Ukairu
the property). Such taxes have been in existence for
24 (2011) made it known that in Nigeria available
millennia and their benefits are well known. They are
information reveals that tax ratio to Gross Domestic
transparent, cheap to administer, efficient to collect and
Product (GDP), using the 2009 index is approximately
Global Journal of Management and Business Research ( B ) Volume XXI Issue II Version I

well understood by the taxpaying public. They are

6%, where countries like Canada, Australia, USA, UK,
administratively feasible in virtually any circumstances
South Africa and China have 33%, 30%, 28%, 39%, 27%,
and, being locationally fixed, are particularly suitable as
and 17% respectively. This indicates that land taxes
a source of locally generated revenue for local
have the potential to generate revenue if they are well
governments.
administered and transparent.
It is a known fact that Property taxation has
Many authors have dealt with land taxes in
rightly been identified as a major tool in the
various ways, but most have not delved into ways in
strengthening of domestic resource mobilization and
which land taxes can contribute to the nation’s GDP in
consequently, the search for ways and means of
terms of revenue generation. Brandon and Bruce (1999)
expanding the tax base and also strengthening tax
undertook comparative analysis of Agricultural property
administration. According to Ajayi, (2008), Olowu, (2002)
taxation in Nebraska. The study only concentrated on
& Adedokun, (2012), it is considered a veritable source
one element of property taxation (i.e. land) neglecting
of revenue for financing developmental as well as
land and building. Property taxation was not linked to
people oriented programs in virtually all countries,
how it is capable of generating revenue in any country.
irrespective of whether they are classified as developed
Whereas Olowu (2002) gives a good insight to a
or developing economies. (Ezemma (2013) affirmed that
comparable analysis of local government usage of
property taxes are beneficial when they are used to
property tax in four countries, his study did not provide
finance services that provide corresponding benefits.
an insight into the major components of property (land)
When services are not provided, the taxes become
taxation and how they can be used in property taxation
onerous. It is therefore agreed that a well-defined
to generate revenue.
property tax laws alone cannot guarantee the success of
In Nigeria, absence of good tax policy system,
tax collection effort. Therefore tax administration must
lack of comprehensive land registration policy and
receive far greater attention if the goals of tax reforms
unavailable information on taxation on land resources
and policies are to be achieved in the face of ever
development are major setbacks identified by some
growing economy.
authors. Also information on the significant impact of
land taxes on land development are often unavailable b) Forms of Property /Land– Based Taxes
and not in a manner that can be used for further In Nigeria, the commonly property based-taxes
discussions especially in the study area. In view of this, that exist are; Transfer Taxes, Capital Gains Tax,
this study is centered to fill the identified gaps in Inheritance and Gift Taxes and Withholding Taxes,
knowledge on the significant impact of taxation on land Property Rating, Development Tax, Land Use Charge,
resources development in Ogun state, using Abeokuta Betterment Tax and Planning Charges (Ogbuefi, 2004 &
South as a case study. Tomori, n. d).
1. Transfer Taxes: Tomori (n. d.) reported that there are
three main components of transfer taxes or fees,
which are based on declared property value, stamp
duty, assignment fees and title registration.

© 2021 Global Journals

 An Assessment of the Impact of Land Taxation on Land Resources Development in Ogun State Nigeria

a. Stamp Duty: Stamp duty is a levy charged on any and residents of federal Capital territory, Abuja.
document presented to Stamp Duty Office by State Governments collect tax due on rents of
individuals or corporate bodies. It is used to signify individuals resident in their states. The enabling law
government’s seal or any contractual agreement or is section 68 of Personal Income Law Decree No.
deed and the rate chargeable varies according to 104 of 1993 as amended by Finance (Miscellaneous
Document. This is collectable by both Federal and taxation Provision) Decree No. 39 of 1996. It states
State Governments. The Federal Board of Internal thus: “Where a rent becomes due or payable to a
Revenue is charged with the collection of stamp person, the payer of rent shall at the date when the
duty on transactions between corporate bodies tax is paid or credited, which ever first occurs,
while transactions involving individuals are deduct there from tax at the rate of 10 percent of
performed by the state. gross rent and shall forth with pay over to the
b. Consent Fees: These are charges imposed on relevant tax authority, the amount so deducted”
(Tomori, n.d.).

2021
Assignor by virtue of the provision of the Land Use
act of 1978 which vested land in the State Governor. 4. Inheritance and Gift Taxes: The amount of
The charges vary from 10% to 15% of the open inheritance and gift taxes varies according to

Year
market value of the property or the total numerous factors, including the tax group to which
consideration. the taxpayer belongs, the relationship to the person 25
c. Title Registration Fees: The Land title Registry making the request or gift, the value of real property
being inherited or received, and the exempt

Global Journal of Management and Business Research ( B ) Volume XXI Issue II Version I
collects a fee of between 2% to 5% of the reported
price on record the new ownership title into land threshold amounts. The closer the relationship, the
registry book. This tax is chargeable by both state lower the taxes while the higher the value of the
and local governments, and also at the federal subject property, the higher the tax (Tomori, n. d.).
government level (Ogbuefi, 2004). 5. Betterment Tax: A betterment levy is a tax that the
state collects on a plot of land that its actions have
2. Capital Gain Tax/Profit Tax: This is presently in some way made ‘better’. For instance, if building
chargeable at 10% on Capital gains arising from roads, metros or airports with public money leads to
disposal of assets. The Act defines chargeable an appreciation in land prices in the vicinity of the
assets as meaning all forms of property whether seprojects, then landowners enjoy a windfall gain
situated in Nigeria or not and including: (Gupta, 2007). The charge payable according to
a. Options, debts and incorporeal property generally; section 4(3) of Lagos Town Planning Ordinance,
b. Any currency other than Nigerian currency; and Cap.95 of the laws of Federation of Nigeria, 1958, is
c. Any form of property created by the person 50% of the actual value gained. The tax is based on
disposing of it, or otherwise coming to be owned the value gained by the property by determining the
without being acquired. In respect of assets outside value of the property before and after the
Nigeria and development works and charging 50% of the
d. Disposed by non-resident individual enhanced value (Ogbuefi, 2004).
e. Trustee of any trust or settlement, or 6. Planning Rates: According to Ogbuefi (2004), it’s a
f. A company whose activities are managed and type of land taxation imposed on developers of
controlled outside Nigeria. landed property by various town planning authorities
in their respective planning areas. It is usually
CGT is chargeable on that part of the gains (if collected from applicants intending to develop land
any) received or brought into Nigeria when they are orlay out parcels of land, or change uses of existing
dealt with “Capital loss on disposal of any asset is not buildings to new ones (e.g. a residential building
deductible from capital gains on disposal of any other being converted to commercial use).
asset even if both are of the same type (Tomori, n. d.). 7. Land Value Tax: In fact, a tax cadastre needs to
According to Ogbuefi (2004) the Capital Gains Tax record only such information about boundaries,
Decree of 1967 is the major legislation on CGT. The law ownership and improvements. In essence, a land
applied at first to the FCT of Lagos. By the Finance tax or site valuation tax is a levy on the unimproved
(miscellaneous) Taxation Provision Decree of 1967, the value of land. It is an ad valorem tax on land
CGT Tax Decree became retrospectively applicable excluding the value of buildings and other capital
throughout Nigeria in 1975. improvements. A land/location value tax (LVT), also
3. The Withholding Tax on Rent: This tax is chargeable called a site valuation tax, split rate tax, or site-value
on rental income of individuals or corporate Bodies. rating, is a levy on the unimproved value of land. It is
The tax is collectable by both the Federal and State an ad valorem tax because unlike property taxes, it
Governments. The Federal Government collects the disregards the value of buildings, personal property
tax due on properties rented by corporate Bodies and other improvements. A land value tax is

© 2021 Global Journals

 An Assessment of the Impact of Land Taxation on Land Resources Development in Ogun State Nigeria

different from other property taxes, because these function by the state governments has led to Land
are taxes on the combination of land, buildings and Use Charge.
improvements to the site. The land value tax takes 10. Land Use Charge: Land Use Charge is payable
into account the effects of location on land value annually on the value of all real properties situated in
such as proximity to public roads, schools, Lagos (Lagos state is presently the only state
hospitals, access to electric power, etc. or of administering this tax in Nigeria). The Law makes
improvements made to neighboring land, such as each local government the collecting authority within
proximity to shopping complex, security post, bus its territory. However, section 1(3) provides that
stations, pristine parks and recreation facilities. each local government may by written agreement
The philosophical basis for levying the land delegate the collection of rates and assessment of
value tax derives from the fact that the appreciation in privately owned houses or tenement to the State
value of land is created by the combination of public (Sanni, 2010). As reported by Olawande (2010) the
2021

works and the collective actions of the community and payment of the Land Use Charge (which is to be
therefore belongs to the community. The economic based on the annual capital sum) is to be paid by
the owner.
Year

argument for land taxation stems from the fact that, if

income from labor, buildings or machinery and factories Land Use Charge is the consolidation of some
26 are taxed, people are discouraged from constructive (not all) property and land-based rents, rates, taxes and
investments and enterprise and effective developments charges payable under various land-based and property
Global Journal of Management and Business Research ( B ) Volume XXI Issue II Version I

are penalized due to the disincentive effects of the laws such as Land Rates Laws (Land Use Act 1978,
excess burden of taxation. Chapter L5, Laws of the Federation of Nigeria 2004, Part
II, Section 10 (a) and (b) and Osun State Land Law,
8. Road Tax: Road tax, known by various names
Sections 13 and 14, Chapter 150), the Neighbourhood
around the world, is a tax which has to be paid on a
Improvement Charge Law (Osun State Land Law,
motor vehicle before using it on a public road.
Section 15, Chapter 150), Tenement Rates Law (the
9. Tenement Rates: It is a tax charge on a real property Local Government Act of 1976) in the state into a new
and is payable at local level for raising the required and composite land-based and property charge. Aside
revenue to carry out specific developmental this Land Use Charge, inheritance tax at 10 per cent of
projects. The tax is aimed at promoting the total the capital value of the property to be inherited will still
well-being of inhabitants of the local community be paid to the Probate Registry of state high courts for
(Oyegbile, 1996). Franzsen (2002) also reports that the purpose of procuring “Letter of Administration” from
property tax is an annual tax on the ownership (or the governor or else, the management of the property by
occupation) of immovable property (i.e. land and/or the heirs or administrators or successors-in-title
buildings) and serves as an important source of becomes illegal. In some countries, capital transfer tax is
local government revenue in many countries in the 40 per cent of the value. Land Use Charge is a global
world. Tenement rate is statutory revenue that is best practice in property taxation in which some of the
provided under the constitution of the Federal land-based and property taxes, charges and rates like
Republic of Nigeria as part of the revenue ground rent, neighbourhood improvement levy,
collectable by the local government councils. The tenement rate etc are consolidated, billed and collected
forth schedule of Section 7 of the Nigerian as a one-off charge for ease of payment by property
constitution provides that the local governments owners. This is based on the fact that it will be cheaper
access, demand and collect tenement rates from and easier to charge some related and annual property
owners of properties that are existing in the area and land-based rents, rates and levies together and
council. However, lack of capacity to efficiently shared between the concerned stakeholders (state and
collect this tax coupled with corruption, has led to local governments). In Scotland, United Kingdom, this
the collection of this property tax by some state Land Use Charge plus waste management levy, water
governments. These state governments rely on rate and security tax is called Council Tax. Land Use
inefficiency on the part of the local government Charge efficient administration is a good way of
administrators to effectively and efficiently collect generating employment and income for some people
tenement rates as an excuse for hijacking this who are in charge of determination of amount due,
function from the local government authority. A collection and punishing defaulters. The Law makes
supporter of local government autonomy will see it each local government the collecting authority within its
as greed on the part of the state governors and a territory. However, section 1(3) provides that each local
way to sniff life out of local councils. After all, the government may, by written agreement, delegate the
state governments are not efficient in some areas collection of rates and assessment of privately owned
and the federal government continues to recognize houses or tenement to the State.
them. What the local governments need is capacity
development. The hijacking of this tax collection
© 2021 Global Journals
 An Assessment of the Impact of Land Taxation on Land Resources Development in Ogun State Nigeria

The consolidation of these taxes and rents developing countries, 35% (up from 30% in earlier
makes it efficient, effective and economical for the decades) in developed countries, although only
government to collect and property owners to pay their 12% in transition countries. In the same period,
bills. Every land-based and property charge, rate and property taxes financed a bit more than 10% of
rent law envisage that there will be defaulters (for subnational expenditure in developed and
example, Section 18 of the Osun Land Use Charge Law, developing countries, although little more than half
March 2016) and clearly states penalties. Land Use that much in transition countries.
Charge is an unavoidable tool of poverty reduction, 5. Property taxes are much more important in rich
income generation and environmental repair in that all (OECD) countries than in developing or transition
land uses (residential, transport, commercial, industrial, countries. For example, the highest property tax to
recreation etc.) and property development have intrinsic GDP ratio (4.1%) was in Canada, followed by the
problems of desertification and/or environmental United States (2.9%), and Australia (2.5%): it is likely
pollution and depletion of land constituents. not a coincidence that all three is rich federations.

2021
On the other hand, the lowest ratio recorded
c) The Roles and Impacts of Land/Property Based
(0.01%) was also in a rich federal country (Austria),

Year
Taxesonland Resources Development
and some developing and transition countries
Taxes on land and property have both fiscal
(South Africa, Latvia) had relatively high (over 1%)
and non-fiscal impacts (Richard & Slack, 2002). Various 27
ratios, so there is clearly more to it than simply
authors have written on the benefits of different types of
wealth. Countries like Nigeria has 0.001% ratio.

Global Journal of Management and Business Research ( B ) Volume XXI Issue II Version I
land-based and property taxes. Some studies have
6. Autonomous expenditure decisions: Local
focused on rural land taxation (Bird, 1974, Strasma et
governments are able to make autonomous
al., 1987), some on urban property taxes (Bahl & Linn,
expenditures because of land-based income they
1992), and some on land value taxation as opposed to
are able to generate. None of these characteristics
property taxation more generally (Andelson, 2000, Mc
has changed much in recent decades, with the
Cluskey & Franzsen, 2001). These roles are:
exception of a relative decline in the importance of
1. Land-based taxes are means of wealth land-based taxes as a share of subnational revenue
redistribution. Since housing is a basic right of all (and expenditure) in developing countries.
human beings, it is pertinent that government Dependence on property taxes as a source of local
encourages every resident to have access to land government revenue varies across jurisdictions
and property. This can only be done through depending upon many factors, such as the
efficient land-based taxes. expenditure responsibilities assigned to local
2. Land-based taxes are means of controlling governments, the other revenues available to them
development: Human beings are useless without (such as intergovernmental transfers, user fees, and
control. Land-based taxes are used to control other taxes), the degree of freedom local
physical development. For example, converting governments have with respect to property taxation,
residential to commercial use may attract heavy the size and growth of the tax base available to
taxes. them, and their willingness and ability to enforce
3. Source of Revenue: Taxes on land and property are such taxes.
at best minor revenue sources in all countries. For The impacts of land-property based taxes
the developing countries, these taxes accounted for include primarily efficient land management and
0.4% of GDP and about 2% of total tax revenues in administration and secondarily employment generation
the 1990s, down slightly from earlier decades, and revenue to the governments. Through land-property
although the equivalent share for the OECD based taxes, local governments will be able to monitor
countries remained at a bit more than 1% of GDP and control physical development within its jurisdiction,
and about 4% of all tax revenues throughout the create employment, forestall abandoned property
period. According to Nwannekanma (2017), “in redistribute wealth, developments and generate income.
spite of the challenging financial crisis in the country Human beings are generally greedy and are the only
and its attendant effect on businesses, the Lagos animals that exhibit multi-territoriality, that is, the trait of
State government has announced a revenue having control over one abode at a time. Without control
performance of N20.7 billion from land human beings are oppressive and will have more than
administration in the last one-year”. what they can use if they have the resources. This is why
4. Property taxes are important sources of sub national there are minimum and maximum standard in housing
revenue in many countries, and more so in developments in countries like United Kingdom, Egypt
developing than in developed or transition and Rwanda. The level of efficiency of collection of land-
countries. In terms of sub national taxes (instead of property based taxes is correlated with the level of
sub national revenues, in the 1990s, property taxes civilization of governments. While the percentage of
accounted for 40% of all sub national taxes in success of collection in countries like United States of

© 2021 Global Journals

 An Assessment of the Impact of Land Taxation on Land Resources Development in Ogun State Nigeria

America and United Kingdom are over 85%, it is lesser NIPOST stamps are no more used for agreement and
than 1% in Nigeria. Lagos State has success rate of less capital transfer tax is not efficient because most
than 30%, Rivers has 22%, Ogun has 10%, Oyo has inheritors of properties do not collect Letter of
3%., while states like Taraba, Yobe, Adamawa, Borno, Administration from Probate Registry of High Courts.
Kebbi and Zamfara has 0%.
III. Research Methodology and Study
d) Challenges of Land and Property -Based Taxes in
Area
Nigeria
The level of non-compliance amongst taxpayers a) Research Method
call for a major concern. Government should A quantitative approach was adopted in this
concentrate on the tax compliance amongst the tax study, using questionnaire and a semi structured
payers, if it expects any improvement in the revenue. interview as an instrument for data collection. The target
Ahmed (2007), from his own study revealed that there is population of the study were the Estate Surveyors and
2021

a major difference in tax compliance behaviour and tax Valuers and the government officials at the Bureau of
knowledge amongst people. People with adequate Lands and Survey. Eighty–six (86) number
Year

awareness and knowledge about tax seem to see it as a questionnaires were administered to 15 estate surveyors
civil responsibility and they comply with its laws and and valuers practicing in Abeokuta South LGA, out of
28 policy, unlike the non-knowledgeable ones. Ordinarily, which seventy-five (75) were used while interview was
no one would be interested in paying tax unless conducted amongst four (4) senior cadre staff at the
Global Journal of Management and Business Research ( B ) Volume XXI Issue II Version I

government adopts policies and strategies and review lands department, in the Bureau of lands and survey.
laws that would make people to comply with it. Wenzel The purpose of the interview was to identify the various
(2007) and Murphy (2008) from their own study opined forms of land-based taxes existing in the study area and
that tax is like a bitter-pill which no one would be willing the significant impact it has on land resources
to swallow. In view of this tax laws most especially in development. The questionnaires administered to
Nigeria should be such that it is understood by property owners through the estate valuers will elucidate
everyone. It should be direct and very clear to enable the opinion of the respondent on the significant impact
citizen see it as a moral obligation of uplifting one’s of taxation on resources development in Abeokuta
nation. South in Ogun state.
Orekan, (2019), also discussed that corruption
b) Study Area
is one of the challenges in Nigeria. Local governments
Abeokuta South local government area is
do not give proper accounts of the amount collected as
usually referred to as the premier local government
revenue from land and properties within its jurisdiction.
owing to the historic eminence of that geographical
Lack of capacity to collect land-based taxes by local
entity as the traditional seat of the local or Native
governments because of the unqualified staff and cost
Authority in Egba since 1898 as well as the seat of the
of collection, and litigation from disagreements from
government of Ogun state that came into existence in
payers is major challenges. Example is Attorney General
1976. Abeokuta South LGA has its headquarters at Ake
of Lagos State vs Airtel Nigeria Limited. This is a
and the Abeokuta North local government has its
litigation with originating summon in 2011 arising due to
headquarters at Akomoje. Abeokuta South LGA is
the fact that Airtel disagreed to pay levies on its private
mainly inhabited by the Egba Ake stock. The Local
parking lot in Victoria Island. In an appeal
government has about 35KM of tarred roads scattered
CA/L/311/2013 which judgment was given on
within the area. The tarring of these roads is mainly
Wednesday, July 12, 2017. The governments must
through direct labour by the works and housing
engage professionals’ estate surveyors and valuers if
department of the local government. The local
they want to achieve efficiency without multiple
government has housing estates at Asero and along old
taxations. For example, some properties are entitled to
Owode road. The Local Government is divided into 15
pay capital gain taxes without government knowing.
wards.
Stamp duties payment has also being stopped after

IV. Data Presentation and Discussion of Findings

Table 4.1: Respondents Opinion on the Forms of Land and Property Based Tax in Abeokuta South
Forms of Land and Property Based Tax Option
Consent fee Available
Stamp-duty Available
Title Registration fee Available
Capital gain tax Not available
Withholding tax on rent Not available
Inheritance and gift tax Not available

© 2021 Global Journals

 An Assessment of the Impact of Land Taxation on Land Resources Development in Ogun State Nigeria

Betterment tax Not available

Planning rate Available
Tenement rate Available
Land use charge Not available
Land value tax Not available
Source: Field work
From the interview conducted amongst the shows that the same land and property based tax levied
government officials at the Bureau of Lands and survey, in Abeokuta South local government will be levied
it was revealed that the various forms of land and across other local government area in the State. The
property based tax are; stamp duty, consent fee, title table also revealed that capital gain tax, withholding tax
registration fee, planning rate, tenement rate are the on rent, inheritance tax or gift tax, betterment tax, land
land and property based taxes levied on the residents in use charge and land value tax does not exist in

2021
the Abeokuta South. This implies that since Abeokuta Abeokuta South local government area.
South is the premier local government in Ogun State, it

Year
Table 4.2: Respondent Opinion of the Effectiveness of Land and Property Based Tax in Abeokuta South
Land and Property Based Tax N Sum Mean Ranking 29
Stamp duty 75 43 4.30 1st

Global Journal of Management and Business Research ( B ) Volume XXI Issue II Version I
Consent fee 75 19 1.90 3rd
Title registration fee 75 33 3.30 2nd
Planning rate 75 16 1.60 5th
Tenement rate 75 18 1.80 4rd
Source: Field Work, 2020
Findings from the table above show the consent fee ranked third with a mean of (1.90),
effectiveness of land and property based tax in Tenement rate, consent fee and planning rate ranked
Abeokuta South. From the result of the questionnaires fourth and fifth respectively with a mean of (1.80) and
administered to the estate surveyors, it revealed that (1.60). Tenement rate, Consent fee and planning rate
stamp duty ranked first with a mean of (4.30) as the were not effective due to lack of inconsistency,
most effective land and property based tax. Title enforcement and continuity in the administration of the
registration fee ranked second with a mean of (3.30), taxes on property owners.
Table 4.3: Respondents Opinion on the Impact of Land and Property Based Tax on Land Resources Development
Impact Frequency Ranking
To a great extent 04 4th
To considerable extent 15 3rd
To moderate extent 19 2nd
To a low extent 37 1st
Total 75 100
Source: Field Work, 2020
Findings from the table above show option for a great extent. It can be deduced from the
respondents’ opinion on the impact of land and property result of the finding that 50% of the respondent which
based tax on land resource development. It revealed represents average opined the impact of land and
that to a low extent was ranked 1st, moderate extent is property based tax on land resources development is at
ranked 2nd and considerable extent is ranked last and no a low extent.
Table 4.4: Respondents opinion on the cause of low effect of property and land based taxes on resources
development

S/no. Option Frequency

1. Lack of appropriate tax policies 4
2. Ignorance (property owner/government) 8
3. Poor assessment & Valuation problems 4
4. Corrupt practices 6
Source: Field Work, 2020

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 An Assessment of the Impact of Land Taxation on Land Resources Development in Ogun State Nigeria

From the interview conducted amongst the 3. Explore ways of using the mass media to publicize
estate surveyors and valuers on the response to the such things as new tax laws, taxpayers’ annual
effect property tax on resources development, it was return obligations, the penalties for evasion, the
revealed that ignorance on the part of tax payers and enforcement activities which are conducted, the
government has the highest effect, followed by corrupt type of people who are caught trying to avoid their
practices amongst the tax authority. Amongst the tax paying responsibilities, etc.
government officials, it was also noted that inappropriate 4. Corrupt-free and efficient administrative machinery
tax policies and poor assessment of properties have with personnel who are adequately trained, well-
negative effect on resource on resource development. equipped and motivated would enable the State to
make appreciable progress in revenue
V. Conclusion implementation.
In Nigeria, land and property based taxation has
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