In a country like Nigeria, where economic inequality is stark and persistent, taxation policy plays a crucial role in shaping the distribution of wealth and resources. Ideally, a well-structured tax system should ensure that the wealthiest citizens, who benefit the most from the country’s resources, contribute their fair share to public coffers. However, the Nigerian taxation policy appears skewed in favour of the elite, particularly when it comes to property taxes in affluent estates.
One of the most glaring examples of this bias is the fact that properties in high-end estates, predominantly occupied by Nigeria’s wealthiest citizens, are either under-taxed or not taxed at all. This reality starkly contrasts with the experiences of average Nigerians, who often bear a disproportionate tax burden despite having far fewer resources. The discrepancy raises serious questions about equity and justice in the Nigerian tax system.
The taxation of property is a fundamental aspect of a fair tax system. Property taxes are typically levied on the value of land and buildings, providing a steady revenue stream for local governments to fund essential services like infrastructure, education, and healthcare. In most countries, property taxes are progressive, meaning that those who own more valuable properties pay more in taxes, reflecting their greater ability to contribute to the public good.
In Nigeria, however, the reverse seems to be the case. Many luxury estates in cities like Lagos and Abuja, where some of the most valuable real estate in the country is located, are often left untaxed or taxed at rates far below their true value. This situation is not due to a lack of legal frameworks; laws exist that mandate the taxation of properties. Instead, the issue lies in the selective enforcement of these laws, a problem that reflects the broader challenges of governance and accountability in Nigeria.
The reasons for this selective enforcement are multifaceted. Corruption is a significant factor, with tax officials often turning a blind eye to the properties of the rich and powerful in exchange for bribes or favours. Additionally, the elites themselves have considerable influence over the political and administrative processes, enabling them to shape policies in ways that protect their interests. This influence ensures that any attempts to reform the property tax system are either watered down or completely stalled.
Moreover, the absence of property taxes on high-value estates deprives the government of much-needed revenue that could be used to address Nigeria’s many developmental challenges. The funds that could be raised from taxing these properties would go a long way in financing public infrastructure, improving healthcare, and providing quality education—services that are critical for reducing poverty and promoting social mobility.
The current policy not only exacerbates inequality but also undermines the social contract between the government and its citizens. When the rich are allowed to evade taxes, the burden falls disproportionately on the middle class and the poor, who already struggle with high taxes on consumption, personal income, and small businesses. This imbalance fuels resentment and erodes trust in the government, leading to a sense of alienation and disillusionment among the populace.
For Nigeria to achieve true economic and social progress, it is imperative that the government revisits its taxation policies. The first step should be the fair and consistent enforcement of property taxes across all estates, regardless of their occupants’ social status. This change would not only increase government revenue but also promote a more equitable distribution of wealth and ensure that the burden of funding public services is shared more fairly.
Furthermore, a transparent and accountable tax collection system must be established to prevent the elite from manipulating the process to their advantage. Such reforms would demonstrate the government’s commitment to justice and equality, helping to rebuild the trust of the Nigerian people.
In conclusion, Nigeria’s current taxation policy, particularly concerning property taxes, is undeniably biased in favour of the elite. This bias not only deepens the divide between the rich and the poor but also hampers the nation’s development. It is high time for the government to address this issue head-on and implement a fairer tax system that holds everyone accountable, regardless of their wealth or status. Only then can Nigeria hope to build a more just and prosperous society.