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Increasing  demand  for  urban  infrastructures on land   and  dwindling  revenue  allocations  in  Nigeria  have informed the Rivers State Government to promulgate Land Use Charge Law (2001) as a way of increasing internally-generated revenues through property tax. The Law stipulates a formula for assessing the Charge payable on properties in Lagos State, amongst other provisions. The aim of this research is to identify the problems and prospects of real property taxation in Nigeria. This study found that high tax and penalties may discourage investment in new housing and maintenance of existing real properties in Nigeria. It therefore recommended a review of the Land Law and in addition suggested an appropriate basis of fair and equitable tax.


The subject of taxation has received considerable intellectual and theoretical attention in the literature. Taxation is one of the most volatile subjects in governance both in the developing and developed nations. Tax refers to a “compulsory levy by a public authority for which nothing is received directly in return” (James and Nobes, 1992). According to Nightingale (2001), “a tax is compulsory contribution, imposed by government, and while taxpayers may receive nothing identifiable in return for their contribution, they nevertheless have the benefit of living in a relatively educated, healthy and safe society”. She further explains that taxation is part of the price to be paid for an organized society and identified six reasons for taxation: provision of public goods, redistribution of income and wealth, promotion of social and economic welfare, economic stability and harmonization and regulation.

In other words, a tax is an imposed levy by the government against the income, profits, property, wealth and consumption of individuals and corporate organizations to enable government obtain the required revenue to provide basic amenities, security and well-being of the citizens. First detailed information about taxation can be found in Ancient Egypt (Webber and Wildavsky,1986). The Pharaohs appointed tax collectors (called scribes) and paid them high salaries to reduce the incentives to enrich themselves. Furthermore, scribes working in the field were controlled by a group of special scribes from head office. Today, corruption of the tax agency is still a problem, especially in developing countries.

Nigeria is governed by a Federal system and the government’s fiscal power is based on a three- tier tax structure divided among the Federal, State, and Local governments, each of which has different tax jurisdictions. The Nigerian tax system is lopsided. The federal government controls all the major sources of revenue like import and excise duties, mining rents and royalties, petroleum profit tax and company income tax, value added tax among other revenue sources. State and local government taxes are minimal, hence, this limits their ability to raise independent revenue and so they depend solely on allocation from Federation Account.

In 1992, the government introduced self  assessment scheme, under which a taxpayer is expected to fill a tax assessment form to determine his taxable income. Here, the intrinsic motivation to pay tax (that is, tax payment) will determine the level of compliance with reporting requirements. Which means that the taxpayer files all required tax returns at the proper time and that the returns accurately report tax liability in accordance with the law. The advent of democratic rule in 1999 has put greater pressure on the three-tier of governments to generate enough revenue and meet electoral promises in terms of provision of basic necessities and infrastructure for the economic empowerment of the people. To achieve these goals taxpayers must pay their taxes willingly as and when due. In other words, a high tax payment is required from the taxpayer in order to achieve a high degree of tax compliance.

Webley et al. (1991), detect a positive relationship between government performance and tax compliance But in spite of all the researches that have been done, more empirical work is needed to confirm the existence of these relationships and to measure the strength of their influence on tax compliance. This is particularly so, since tax compliance is of obvious importance fo r most countries. This work aims to study tax compliance in Nigeria, thereby supplementing empirical research on this important international problem. This is therefore an opportunity to take a stroll through theoretical and empirical findings in the tax payment literature, focusing on Personal Income tax payment.

Funding of infrastructure, especially in urban areas in time of dwindling revenue allocations from the Federal Government, has posed great challenge to State and Local Council Governments. This has led the Lagos State Government to source for a new means of generating additional revenue internally through property tax. The Land Use Charge Law 2001 was therefore a creation of the River State Government to give legal backing to revenue generation through property taxation in order to provide sustainable housing delivery.

A number of questions arise: What will be the short- and long-run effects of the provisions of the Land Use Charge Law on River State Real Estate property magmagers?  Is the basis for calculating the charge reasonable? What is the position of Estate Surveyors and Valuers regarding the provisions of the Law? What is sustainability and sustainable housing delivery? What impact(s) will the Law have on sustainable real property delivery in the study area? The aim of this research is to examine the Land Use Charge Law (2001) and determine its effects on sustainable real property delivery in Nigeria. In doing so, succeeding sections cover the challenge, basic method of determining fair and equitable property tax, highlight the provisions of the Law, and analyze the opinions of practicing Estate Surveyors and Valuers followed by appropriate recommendations.

Low tax compliance is a matter of serious concern in many developing countries. This is because it limits the capacity of government to raise revenue for developmental purposes (Torgler, 2003). This implies that the higher the revenue, the more likely government will put in place developmental plans for the enhancement of the living standard of the people. This is because when people pay taxes more revenue accrues to the government. The major problem of this research therefore, is to determine the effect of tax payment on the taxpayer in compliance with tax policies of government as a useful avenue for revenue generation.

The  more  modern  approach  to  tax  compliance  has  benefited  from  many  contributions  from different disciplines. There is a range of factors that might influence taxpaye’s behavior. For instance, work in sociology has identified a number of relevant variables such as age, gender, race and culture. The role of individuals in the society and accepted norms of behavior have also shown to have a strong influence (Wenzel, 2002). Also Polinsky and Shavell (2000), present a survey of the economic theory of public enforcement of law, and emphasize the aspect of social norms, that can be seen as a general alternative to law enforcement in channeling individual behavior.

There are limits for a government to increase compliance using traditional policies such as audits and fines. Therefore, if the government can influence a norm, tax evasion can be reduced by policy

activities. Most researchers on tax compliance for example, (Torgler, 2003), (McBarnet, 2003) and (Murphy  and  Harris,  2007).  focused  their  attention  on  the  Western  World  and  some  Asian countries. Socio-cultural factors are important components in the lives of a people and given the deep-rooted and pervasiveness of these in the Nigerian societies, there is a clear  need for more empirical research on the factors involved  in the decision making process regard ing compliance, since a better understanding of these factors can give birth to strategies that improve compliance.

This material content is developed to serve as a GUIDE for students to conduct academic research

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