By Nkiru Zikora
There is a great outcry by the residents of the Federal Capital Territory (FCT), Abuja over exorbitant and excessive tenement rate being levied on them. Besides the exorbitant value of the tenement rate, residents living in newly developed estates also complain of being levied tenement rates in arrears for periods that the properties were under development or unoccupied.
Tenement rate is a tax imposed on developed and occupied properties within a local government jurisdiction by the Local Government Authority or as is the case of the Federal Capital Territory (FCT), the Area Council Authority. The powers of local government/area council authority to assess, levy and collect tenement rate on properties within their jurisdiction is derived in pursuant to the provisions of Section 7 and the 4thSchedule to the 1999 constitution of the Federal Republic of Nigeria; and Taxes and Levies (Approved List of Collection) Act No. 21 of 1998. Tenement rates are levied only on developed and occupied properties. Undeveloped and or unoccupied properties cannot and must not be levied.
A quick view of FCT’s Abuja Municipal Area Council (AMAC) Tenement Rate Collection Bye-Law (No. 22) 2012 as amended gazetted in 2019 reveals the establishment of a valuation office which shall be under the supervision of the Local Government Revenue Committee to carry out the assessment of all rateable properties within the area council [Section 1(1)]. Section 1(4) states that valuation office shall consist of a Head of Valuation and such number of staff necessary to assist the head of valuation. Further, section 3 stipulates the appointment of a qualified Estate Surveyor and Valuer registered with the Estate Surveyor and Valuers Registration Board to work under the control and supervision of the Head of valuation to assess the rateable properties. While Section 4 requires the appraiser to gather all the information orally or written as the case maybe and which may affect the assessed value of a tenement. This is to enable him to give a proper assessment of the property. The Tenement Rate Bye-Law for Bwari Area Council revealed that it is about the same with that of AMAC. So both the AMAC and Bwari Area Council’s tenement rates are provided to be at uniform rate of 4k per Nairage of the calculated assessed value (annual value).
The tenement rate is usually levied and paid annually by the property occupant and the amount payable each year is to be assessed based on the annual value of the subject property. The tug of war however still rage between the landlord and the tenant concerning whose responsibility it is to pay the tenement rates.
As stated already, the law provides that it is the responsibility of the
occupier of the property to pay tenement rate and other rates, bills or charges on a rented or leased property. To avoid any conflict arising from the usual debate about whose responsibility tenement rate payments fall, it is advisable to spell this out in the tenancy agreement. This helps bring clarity from the beginning of the tenancy relationship between the Landlord and tenant on who is responsible to pay tenement and other rates. However, in the event where such provisions are not clearly stated in the tenancy agreement, by operation of the law, the occupier of the property, usually the tenant bears the primary liability to pay the tenement rate whether the provision is specified in the tenancy agreement or not.
No doubt, the Local Government/Area Council Authorities have the right by law to assess, levy and collect tenement rate on developed and occupied properties within their areas of jurisdiction. However, there is need for the FCT local authorities to continue to create awareness about the legality of tenement rates. They should equally endeavour to address the strident outcry about what these residents consider as arbitrary and excessive rates imposed on their properties especially in the light of the current harsh economic climate. Occupiers of property continue to insist that their properties were not assessed given that they were never visited by the rating agents to secure necessary information needed for the computation of their property rateable value.
Though the imposition of taxes or rates on the populace especially property taxes may seem a very attractive way through which the government raises revenue, it must be carefully handled to avoid impoverishing the more the already poor masses. There is the urgent need therefore for the FCT Area Councils to consider the dire economic situation in Nigeria presently and ensure that the tenement rates are judiciously assessed and computed as is stipulated in the law.
Zikora, an Estate Surveyor and Valuer, writes from Abuja.
