By Meletus EZE
Chairman of the Royal Institution of Chartered Surveyors (RICS), Mr. Olayinka Omotosho, on Monday identified multiple taxations as the biggest impediment to the growth of the real estate industry in the country.
Omotosho said in Lagos that real estate investors were subjected to multiple taxations, which hindered their effective operation.
According to him, the high construction cost, expensive house rents and services in the industry are as a result of multiple taxes paid by developers and investors.
He enumerated the taxes and levies paid by operators in the industry to include development levy, income tax, building plan approval levy, property tax, land use charge and tax, among others.
He said there were also cases whereby real estate investors were expected to pay renovation tax whenever they want to renovate their properties.
“Taxation is a source of government revenue to fund public expenditures, no doubt, but it should not be exploitative and exorbitant.
“The government needs to look into the tax system and streamline it to make it more reasonable, fair and affordable.
“And to encourage both the local and foreign investors into Industry, the taxes need not to be too much on them,” Omotosho said.
The RICS chairman lamented that the nation’s taxation system was full of loopholes that had rendered it ineffective and unable to achieve set objectives.
He said lack of comprehensive data and assessment was a major hindrance to effective taxation in Nigeria, particularly the property tax.
He said that there were numerous acres of land nationwide which were not registered, while the few registered ones were being overtaxed.
Omotosho said there was need for proper evaluation and documentation of landed property in the country to pave way for effective administration of property taxation.
“In other countries where the taxation system is effective, it is solely revenue from levies and taxes that the government uses to run its affairs.
“It is important that governments have adequate data on the available properties to be able to appropriately collect the taxes because there is no way government can collect taxes on a land it does not know of its existence.
“To have effective property taxation system, a lot of underground works need to be done; there must adequate data on available properties and there must be up-to-date tenancy register.
“A well-structured taxation system is not supposed to be a source of worry/burden to the payers.
“It is supposed to be geared towards efficient wealth creation and distribution,” he said.
