An Examination of Property Tax within the Context of Fiscal Federalism in Nigeria

Abstract

This study critically examined the role of property tax in local government revenue generation and governance in Nigeria, particularly within the fiscal federalism framework. It highlighted the constitutional principles and challenges associated with property taxation, emphasizing the dichotomy between the constitutional empowerment of states to impose property tax and the delegated responsibility for assessment and collection to Local Government Councils (LGC). In this regard, the study adopted a doctrinal method of study, and descriptive and analytical methods was adopted in analyzing primary and secondary sources of material. The study identified the following challenges: centralization at the state level, the absence of a comprehensive database, tax evasion, legal exemptions, skill shortages, lack of political will, and corruption as major challenges of property tax and fiscal federalism in Nigeria. The study therefore concludes and recommends that there is a need for a recalibration within the federalist spirit, urging states to relinquish the unconstitutional centralization of property tax functions and empowering local governments for independent assessment and collection. Furthermore, the study also recommended the empowerment and support of local governments to independently execute these functions, thereby enabling them to generate revenue and effectively fulfill their constitutional obligations.

Keywords: Property Tax, Federalism, Fiscal Federalism, Local Governance, Revenue Generation.