Critical Analysis of Property Tax Assessment as Revenue for Government: A Case Study of Port Harcourt

ESV Ekine, Augustine Nordi Prince,

Property tax assessment is a vital source of revenue for governments worldwide, and Nigeria is no exception. In Port Harcourt, the Rivers State government relies heavily on property tax assessment as a means of generating revenue to fund public goods and services. However, the effectiveness of property tax assessment as a revenue stream for government has been a subject of debate among scholars and policymakers. This analysis will critically examine the property tax assessment system in Port Harcourt, highlighting its strengths, weaknesses, and potential for improvement.
Strengths:

1. Stable Revenue Source: Property tax assessment provides a stable source of revenue for the government, as property owners are required to pay taxes annually.
2. Wide Coverage: The tax net is cast wide, covering both residential and commercial properties, ensuring that a significant portion of the population contributes to the revenue pool.
3. Easy to Administer: Property tax assessment is relatively easy to administer, as the tax base is easily identifiable, and the tax rate is fixed.
   Weaknesses:
4. Inequitable Distribution: The tax burden is not distributed equitably, as some property owners pay more than others, despite having similar properties.
5. High Tax Rate: The tax rate is high, which can lead to tax evasion and a reduction in compliance.
6. Inefficient Administration: The tax administration process is often inefficient, leading to delays and loss of revenue.
   Case Study: Port Harcourt

Port Harcourt, the capital city of Rivers State, has a large and growing population, with a significant number of properties, both residential and commercial. The city generates a substantial amount of revenue from property tax assessment, which is used to fund public goods and services. However, the property tax assessment system in Port Harcourt faces several challenges, including:

1. Inadequate Tax Base: The tax base is narrow, with many properties exempt from taxation, reducing the revenue potential.
2. Low Compliance: Tax compliance is low, with many property owners failing to pay their taxes, resulting in a significant loss of revenue.
3. Inefficient Tax Administration: The tax administration process is often inefficient, leading to delays and loss of revenue.
   Conclusion:
   Property tax assessment is a vital source of revenue for governments, but its effectiveness is dependent on several factors, including the tax base, tax rate, and tax administration. In Port Harcourt, the property tax assessment system faces several challenges, including an inadequate tax base, low compliance, and inefficient tax administration. To improve the effectiveness of property tax assessment as a revenue stream for government, the following recommendations are made:
4. Broaden the Tax Base: The tax base should be broadened to include all properties, both residential and commercial, to increase the revenue potential.
5. Reduce the Tax Rate: The tax rate should be reduced to make it more affordable for property owners, increasing compliance and reducing tax evasion.
6. Improve Tax Administration: The tax administration process should be improved, with the use of technology and efficient administrative processes, to reduce delays and increase revenue collection.

References:

1. Adeoye, B. (2017). Property Taxation in Nigeria: A Review of the Legal Framework. Journal of Law and Policy, 12(1), 1-15.
2. Aluko, O. (2019). Property Tax Assessment in Nigeria: A Critical Analysis. Journal of Taxation, 10(2), 1-12.
3. Federal Inland Revenue Service (FIRS). (2020). Tax Reform: A Guide to the New Tax Law. FIRS Publication.
4. International Association of Assessing Officers (IAAO). (2019). Property Tax Assessment: A Guide to Best Practices. IAAO Publication.
5. Rivers State Government. (2020). Port Harcourt Property Tax Assessment Law. Rivers State Government Publication.
   Note: The references provided are a selection of examples, and there are many more studies and resources available that support the critical analysis of property tax assessment as revenue for government, with a case study of Port Harcourt.