PROBLEMS AND PROSPECTS OF PROPERTY RATING ADMINISTRATION IN NIGERIA

(a case study of Karu Local Government Area)

ABSTRACT

Local Government Areas in Nigeria has been dependent on funds from Federal allocation which have proved inefficient for effective urban governance and property alleviation. The Karu Local Government reform is meant to reverse the deteriorating state of affair in grassroots governance especially the weak financial base of the Karu Local Government Area. This has been found not to improve the situation significantly. As over 70% of Karu Local Government Revenue continues to come from Federal Government allocation rather than through viable local sources (especially property rating administration). This project work is meant to examine and determining the financial benefit of the assessment of property rating administration and management of Karu Local Government Area. The problems associated with collection of the rating administration and management of Karu Local Government Area and suggest possible solutions to the problems in the area of study.

CHAPTER ONE

1.0 INTRODUCTION

1.1 BACK GROUND OF THE STUDY

The origin of property rating dated back to the middle age when rate were imposed or levied on local resident in order to raise money for the procurement of finished goods which was to be given to the poor and provide them with a source of livelihood. This was special to as Elizabethan poor law and was backed by the British poor relief Act of 1601. In Nigeria however, property rating could be traced to the Nigeria statutory book of 1915 which was fashioned out of the British Act.

Generally, rates are taxes lexes levied on the occupiers of property. Although rates are forms of taxation, the term tenements are property rate are used to describe property rate rather than the term Tax. It is the person in occupation of the property and not just the owner of the property who bears the final burden of tax.

The Local Government has in the years experienced poor state of economy and increasing cost of government. To this and local government have been empowered by law to generate same internal revenue and one of such source of revenue is the property rate or tenement rate where in various hereditament with in a local government and are valued, rated and taxed.

Nasarawa State Rating Taxation Law 2000 and empowered all local government within its jurisdiction to raise its revenue base through rating taxation. The quality of our living environment depends on the ability of state or local governments to provide to maintain and ménage their facilities and services Karu local Government Area was not an exception. Although rating law was adhered but its administration and management are full of problems flows and mismanagement.

However the provision and maintenance of basic infrastructural facilities and prosecution of various developmental projects came to a stand through lock of finance. Such service on and should be readily. Provided for if the local administration is able to organize and motivate the inhabitant of the area to see the need to make regular contribution through payment of property rates for the provision of common services for the use and benefit of all members of the community. In the preliminary survey of Karu Local Government Area (the case study of this research) some flaws were observed some of which are.

Poor and shoddy administration and mismanagement of revenue collection.
Not strictly adhering to the dictate of Nasarawa property rating laws.

1.2 STATEMENT OF THE RESEARCH PROBLEM

This research work will look into the problem militating against the effective assessment of rating administration and management of Karu Local Government Area which are:

The problem arising from the application of the rating law.
The modes of administering this form of taxation.
The section of property law been exacted by the enabling tax authority followed to adhered to.
Provision of basic infrastructural facilities because or due to lack of finance or revenue collection.

1.3 AIM AND OBJECTIVES OF THE STUDY

Aim

The aim of the research work is to examine and access the problems and prospects of property rating administration in Karu local government area.

Objectives

The following are the objective of the research work:

To review the literature of property rating administration in Nigeria and principle of rating assessment.
To review the enabling law on property rating in the study area.
To examine the procedure and the method of assessment of property rating in the study area, and whether it conforms to the enabling law.
To assess the income growth from rating in Karu Local Government over the years.
To identify the problem associated with rating in Karu Local Government Area.
To suggest possible solution to the identified problem and make recommendation when necessary.

1.4 RESEARCH QUESTIONS

From the statement of the problem above the following research question are pertinent:

Does property rating law exist in the state and has Karu local government applied to its rating administration?
How is the rating administration and collection growing over the years?
What are the challenges faced in collection of property rate in the study area?
With particular reference to Karu Local Government Area, what are the modes of administering this form of taxation?

1.5 SIGNIFICANCE OF THE STUDY

The significance is that this study will go a long way in examining and determining the financial benefit or worth-whilness of property rating. In view of this, the outcome of the study will stimulate or encourage other local government in working or the prospect of applying rating as a source of revenue. It will also aid the students of estate management and valuation, other related fields in carrying out further research work.

1.6 SCOPE AND LIMITATION OF THE STUDY

The research study is basically limited to Karu local government area being the study area of this research work. The study shall examine the revenue generated via tenement rate or property rate in the study. It shall study the problems encountered in property rating and proffer solution to these problems with a view towards increasing revenue for the local government.

1.7 OPERATIONAL DEFINITION OF TERMS

In this certain terms or wards will be used and explained which are as follows:

PROPERTY: property has to do with the right that can be exercised in land. The ruling judge in the case of Mckeon V. Bisbee G. Califf 137 (1898) define property as ‘’the exclusive right of possessing, enjoying and disposing of a thing’’. Ely (1914) describes property as ‘’bundles of right’’ which means property comprises of many right in order words, according to oluusegun, (2002) property is the aggregate bundle or right and privileges among people and between a person and his government in relation to a thing. Property in this context is developed lands and all form of buildings. Liferally, property is said to be a physical thing that someone has as his/her own possession example, car and furniture.
RATING: According to Kuye o. (2002) defined rating as the process of assessing and fixing a rate.
PROPERTY RATING: Rate is defined as an amount which a property owner or a hereditament is liable to pay to the government as tax. In other words, according to oxford Advance learners dictionary (7^th Edition 2005) rate is a fixed amount of money that is charged or paid for something, or as a fax paid by business man to a local government authority for land and buildings that he uses and in the past also paid by anyone who owned a house.
ADMINISTRATION: The Oxford Advanced Learner’s Dictionary (7^th Edition, 2000) defines administration as the activities that are done in order to plan, organize and run a business, school or other institution. In order words, it is the process or act of organizing the way that something is done.
RATE: Rate is defined as an amount which a property owner or a hereditament is liable to pay to the government as tax.
LOCAL GOVERNMENT: According to Hangman Dictionary (3^rd edition) Local Government is the government of cities, town etc. by elected representatives of the people living in them. Furthermore, in the advance learners dictionary state that a local government is a distinct government which has the set of people to whom the power to govern is entrusted. Bryan (1970) defined local government as any organization that govern an area smaller than a state.
LAND: Land is the earth crust and all things permanently attached to it. Barlowe, (1978) Land is the solid portion of the earth surface “Land is the earth’s surface extending down word to the center of earth and including all things permanently attached to this research topic is the earth’s surface, the basement at which all form of property are and to which property taxes are levied.
FINANCE: Finance is money or revenue duly collected meticulously and administered in accordance to the fulfillment of some objectives. According to the Oxford Advance Learners Dictionary, defined finance as money used to run a business, an activity or a project.

BACK GROUND OF THE STUDY AREA

Karu is a local government area in Nasarawa State Central Nigeria. It is close in proximity to the federal capital territory of Nigeria. It has an area of 2,640m2. Karu local government has its local government headquarters in new Karu town. According to the 2006 census, the population of mainly Karu town was 205,477 Karu urban area in Karu local government has about two million inhabitants, which Karu metropolitan area which extends beyond Karu urban area covering about 1,325km2 has a population of about 4.2 million inhabitants.

Before 1970, the present location of urban area known as Karu, was a site containing forest vegetation, ridges and isolated mountain and some villages known as Kurunduma, Karu (now Nyanya), Maraba Gurku, Ado, Masaka and Uke.

All of these villages were people of Gbayi, Gwandara and Gede ethnic groups. They were under the ruler ship of the traditional ruler known as the Esu of Karu who is still a major traditional authority in the region today. In 1970s plans were to have Nigeria capital relocated from Lagos to the center of the country. This site was chosen for for the new capital to be build was very close to these villages that made up the area which was a sparsely populated zone, characteristics of Nigeria’s middle belt. These villages are serving as satellite towns for the federal capital city of Abuja. The role of capital city and the villages which are serving as satellite town to Abuja will help in adsorbing some of the populations. In the 1980s Nigeria government began shifting it activities to Abuja countries with diplomatic ties with, Nigeria began relocating their embassies to Abuja and economic community of west African state headquarter together with the regional headquarter of OPEC were moved to Abuja from Lagos. This resulted in the rapid boom in population of Abuja, Karu area was also affected, as the villages under it also experienced rapid growth due to their close proximity to Abuja. Karu area was also receiving a small part of the immigrant which migrated from the capital federal city but were willing to enjoy the standard of living the villages in Karu area has to after. This was to be the beginning of the urbanization of the Karu area. The population of Abuja spiraled out of control in the late 1990s resulting in the breakdown of infrastructure in the city, heavy traffic congestion and slow commercial activities which became an obstacle to the easy flow of administrative activities which Abuja was built for. Around the early 2000, the population of Abuja grew at a very fast rate and as a result shanties were springing up on the city out starts. The federal capital territory administration which was the government authority responsible for governing Abuja embarked on a campaign to restore sanity to Karu.

URBAN AREA IN KARU

Karu Local Government Area is notable for containing a contribution of differed districts of town covering 24km distance along the Keffi-Abuja expressway. The towns within this conurbation are merging with neighboring urban cities forming a town and urban districts.

URBAN DEVELOPMENT OF KARU

Karu urban area’s rapid growth began attracting some services such as banking, hospitality, industries engineering firm and other service providers that were based in Abuja to begin establishing their presence in the emerging urban centre of Karu, leading to a faster population growth since these services made Karu urban area more popular than ever, thereby, attracting people from other parts of the country, reluctant to live in Abuja due to the high cost of living there, to settle in Karu, which was regarded as a new urban area that grew as a result of Abuja’s influence. The town in Karu urban area soon began merging with earth other to form a conurbation along with other towns and village in the Karu urban area formed an agglomeration of towns with a population of around two million people, surpassing Abuja city’s population of 776,298, according to the 2006 census.

GOVERNMENT AND ADMINISTRATION

Karu local government area is governed directly by a chairman who is elected to govern the local government area for a period of four years. The secretariat of Karu Local Government Area is located in new karu town, which is the headquarters of Karu Local Government Area. The Local Government Council is responsible for the development of infrastructures in karu urban area. With the backing of the State Government of Nasarawa State. The Esu of Karu, the traditional ruler of new karu, is a recognized tradition authority in the local government area. The esu of karu also serves as the record keeper of the history of the Karu area.

WEATHER AND CLIMATE

Karu Local Government Area, is found within the tropical savanna climate of central Nigeria, with an alternating raining season and dry season, the raining season begin from April and ends in November. Rainfall in the urban area high owning to its location on the wind word side of the Jos Plateau and the zone of air masses. The annual total rainfall is the range of 1100mm to 1600mm.

HEALTH

Karu urban area is also serving as a health centre in central Nigeria with an established number of hospitals medical centers and climate. All of these health services are located in Karu urban area the neighboring towns, providing health services to population in need of the agglomeration of towns in Karu area and beyond.

TRANSPORTATION

The Karu region is served by a expressway connecting Abuja to the urban area in Karu. The expressway is owned by Nigeria’s Federal Government to facilitate movement in the urban zone.

EDUCATION

The agglomeration in the Karu area, has attracted private investment in education to take care of the growing young and adult illiterate population in need of educational institutions. Karu area has a number of primary schools, secondary school etc.

POSTAL CODE

The postal code of the area is 961.

PROBLEMS AND PROSPECTS OF PROPERTY RATING ADMINISTRATION IN NIGERIA

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