4.IJAEST-Vol-No-7-Issue-No-1-DEVELOPMENT-OF-A-GEOSPATIAL-INFORMATION-SYSTEM-OF-LAND-PROPERTY-TAX-REV by ISERP ISERP

YOUNGU, T.T* et al. / (IJAEST) INTERNATIONAL JOURNAL OF ADVANCED ENGINEERING SCIENCES AND TECHNOLOGIES Vol No. 7, Issue No. 1, 023 - 035

DEVELOPMENT OF A GEOSPATIAL INFORMATION SYSTEM OF LAND PROPERTY TAX REVENUE FOR AREA “2” ABUJA 1 1

YOUNGU, T.T*, 2SULE, J.O, 3BICHI, M.A. and 4ABDULAZEEZ, I.

terwasey2000@gmail.com*; 2suleimanjimoh@gmail.com; 3mbichi@live.com, 4Bigazeez001@yahoo.com Department of Geomatics, Ahmadu Bello University, Zaria, Kaduna State – Nigeria.

ABSTRACT

The need to raise sufficient finance for city administration to function effectively well is perhaps the main objectives of city governance. But only with steady and predictable annual revenue that it will be possible to plan actions for sustainable development. The development of geospatial database information system of property tax revenue for Area “2”, Abuja, was embarked upon to provide timely, consistent and accurate information to decision makers for use in planning of the area. The problem of property tax collection has not been an issue taxed by successive government but because effective institutional framework for collection, storing, analyzing, querying and management of the database has not been given its due attention. What is needed is a system that allows city managers to identify all taxable units and determine the tax payable. That technology is a Geographical Information System (GIS) which is playing active role in spatial problems and decision making. The method employed was to acquire personal data of everybody who owns a plot in Area ''2'' and their respective locations. A digital layout plan of the area was also provided showing the location of each and every plot in Area “2. The geo-database was created using Microsoft Excel 2007, and ArcGIS 9.2 software. The database was queried and the results of the queries analyzed. The results showed that revenue collected for the year 2010 is in the vicinity of N37, 815,608.22 (ThirtySeven Million Eight Hundred and Fifteen Thousand, Six Hundred and Eight Naira, Twenty Two Kobo) with an average revenue of N184, 533.17 (One Hundred and Eighty Four thousand, Five Hundred and Thirty Three Naira, Seventeen Kobo) from residential areas (182 plots). The residential plots combined with other plots such as commercial, educational, recreational, religious and green areas summed up to 198 plots with a total area of 21.2484 hectares. KEY WORDS: Real Property, Property Tax System & Assessment, Revenue, GIS, Planning and NGDI.

INTRODUCTION The most lucrative single source of Federal revenue in Nigeria comes from oil. Originally, this fund was kept entirely by the Federal Government only with a token gift to states and Local governments. As a result, the Federal Government revenue increased in leaps and bounds year in year out, while states and local Governments 1

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hardly made ends meet and were in fact drawing up annual budget deficits. However, this ugly situation has changed in recent years after much pressure from the stakeholders and other pressure groups. The technological development wind sweeping across the Globe is finding its way into the Property Tax System in Nigeria, and it needs to avail itself of this golden opportunity if it is to make impact among the committee of developing nations. A state faced with inadequate infrastructure, low income capital, poor medical facilities etc. is doomed to fall under a failed state which the consequence can best be imagined [1]. It is in realization of these factors confronting human beings that government policy

makers look inwards to source for funds to meet these challenging demands. One of such sources is the imposition, management and cost effective way of the collection of property tax. It is against this background that a critical look of property tax in

contemporary economy becomes imperative and a subject matter of this study [2]. In modern times, land property is a highly priced property. It is most valued and attracts very high commercial ratings. This is as a result of urbanization, industrialization and the development of sophisticated agriculture in both private and public sector of the economy [3].

Property taxation is a big business if properly managed. The present Lagos state

Government has taken the bull by the horn. While acknowledging that the “Fashola administration” has tried to address infrastructure decay and provision – both of which are ingredients of slum creation, the state government has generated billions of Naira

from taxes and it is obvious that the environment in which the state or local Government find themselves may be accountable for such easy acceptance and collection of such taxes [4]. Several studies have been carried out on reforming property tax in the past because they not only help in providing or improving infrastructure in the state or local government but provide the necessary machinery, information, and statistical data required by governments, planners, tax collectors and valuation officers as an effective instrument for policy formulation and in solving future perennial problems. One of such works carried out is “Reforming Property Tax in Anglophone Africa”,

[5]

The fairness of property tax collection and distribution is a hotly-debated topic. 2 ISSN: 2230-7818

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Collectors have difficulties in identifying the valuation list entries on the ground. The underlying cause was the deep organizational and cultural gap between the two bodies (i.e. Land Valuation Board and the City Council) whose need it is to work closely together. The lesson learned was that unique property identification is a prerequisite for success and that there must be the political will at the highest level to impose a solution if necessary. In India, in a work titled â&#x20AC;&#x153;Trends, Issues and Reforms of taxâ&#x20AC;? it was stated that tax assessor offices are responsible to maintain inventory information about improvements to real estate. They should also create and maintain tax maps. This can be

accomplished with the help of surveyors. On tax maps, individual properties are shown and given unique parcel identifiers (commonly called Assessor's Parcel Numbers, or (APNs). The tax maps may help to ensure that properties are not omitted from the tax rolls and that properties are not taxed more than once which is one of the major

problems that were experienced. Real property taxes were usually collected by an official other than the assessor [6].

In 2002 an edited article titled "Property Tax in the United States" was published [7]. It presented said that local property tax administrators lack the legal authority, skills, and resources needed to assess and collect taxes. The property records did not show the

changes that have taken place since the last revaluation. In the meantime, the city may have expanded considerably, and there could have been changes and alterations to the existing properties. The survey records were incomplete and inaccurate and made the collection of property tax difficult. In such cases, the surveying and referencing work

required to bring the records up to date is usually the single most time consuming task. It is in the nature of accumulated maintenance. If the records are kept up to date in the future, it will not occur again [7]. Lesotho has the advantage of a good mapping system and a sound system of uniquely identifying plots under the control of the Surveyor General. But this is in contrast with the situation on the ground where there are numbers not marked on the properties and few named streets. There is a sound system of land tenure. All the land is vested in the state, and leases of 30, 60 or 90 years are granted. But this apparent control contrasts with the reality of large, unplanned expansions of the urban areas often without defined streets and houses on large irregular plots. The size of the problem is not large 3

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compared with some of the examples shown elsewhere. Maseru has a population of about 225,000. In April 1991, the valuation lists contained 6,900 entries in Maseru and a further 5,500 elsewhere in Lesotho with plans to increase the coverage by more than 20,000 by 1994[5]. The Illinois Department of Revenue (DOR) collects taxes for both the State of Illinois and units of local government. In Fiscal Year 1992, the Department collected $14.5 billion in taxes including $12.1 billion in State taxes and $2.4 billion in local taxes. Taxes collected by the Department account for 73 percent of general fund receipts for the State. There are more than 6,600 taxing districts in Illinois. The common thread

throughout DOR data is geography: taxing districts, income, and property tax data, legislative districts, municipal boundaries, demographic data, and so forth, can all be located geographically on the face of the earth. Because of this, GIS technology can be used to link these various tax data sets allowing much more effective analysis.

Understanding this, DOR has formulated the goal "to develop and maintain a geographic information system (GIS) that would enable the Department to give accurate and expeditious statistical information regarding income tax, and property tax as it relates to a geographical area or location” [8].

In 2004 the United Nations Development Program (UNDP) with technical assistance

from UN-HABITAT helped to increase the annual property tax revenue collected in Somaliland by 248 percent from USD 169,062 in 2005 to USD 588,754 in 2008. This tremendous improvement started when a Geographic information System (GIS) was established in Hargesia municipality and funded by the European commission and

United Nations Development Program [9]. In a paper presented at the Institute's prestigious international conferences titled “Property tax based revenue collection GIS in the developing cities – a new approach

for sustainable urban development” it explained how cities in the developing countries face constant problems with urban management. International financing and development agencies, like World Bank, Asian Development Bank, and UN-Habitat, have devised several programmes and initiatives to solve this problem. The need to raise sufficient finance for city administrations to function effectively is perhaps the main objective of city governance. The first priority is to enable the Local Government Unit (LGU) to generate its own permanent revenue base. Only with steady and 4

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predictable annual revenue is it possible to plan actions for sustainable development. Property taxation seems to be the easiest direct revenue source for the developing cities. What is needed is a system that allows city managers to identify all taxable units and determine the tax payable. This information needs to be linked to Geographical Information Systems (GIS) and an accounting system that will produce bills, monitor receipts and notify the need for action on arrears. Two pilot areas have been identified (Gaza City in Palestine and Kanpur in Uttar Pradesh State in India) where the first attempts similar to this new approach have been made. The results have been quite encouraging. The results are compared and recommendations on the future action were

given [10]. The word GIS, has a wider application; especially land based location references of object, phenomena in space. It has a stronger relationship for geographic location in

space. Others call it geo-information system or geospatial system or even georeferenced system. Geospatial information refers to information that identifies the geographic location of natural or constructed features and boundaries on the earth; including the oceans while, geospatial databases are databases that include information about the location (street address, latitude and longitude, section/township/range) of features in the databases. For many information technology applications, this location

information is a key component that facilitates the integration and analysis of data [11]. Nigeria has incorporated the National Geographic Information System (NAGIS) and National Geographic Information Infrastructure (NAGII) into what is referred to as the

National Geospatial Data Infrastructure (NGDI) which started a few years ago under the auspices of the Federal Survey Department [12]. NGDI provides a basis for spatial data discovery, evaluation, and application for users and providers within all levels of government, the commercial sector, the non-profit sector, and academia and citizens in general [13].

Therefore, GIS is a means to an end and not an end in itself. It can be seen as a medium for data gathering (capturing), data analysis, data storage, data manipulation, data management and administration and the application of these for problem solving according to the needs, requirement of professional or user requirement per time. The key to the use of a GIS is the input of the precise geographic data, such as the 5 ISSN: 2230-7818

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geographic coordinates of a village. This kind of information can be obtained either from existing maps or with Global Positioning System (GPS) receivers [14]. This study thus presents the application of GIS in the estimation of property tax revenue due from Area “2” Abuja. 2

SIGNIFICANCE OF STUDY The poor state of basic infrastructure like electricity, water, roads etc. in Area “2” of Abuja has been attributed to the lack of adequate municipal revenue to enable government invest in infrastructures and services for the benefit of the people. This is property building as well as their condition.

premised on lack of adequate man power and comprehensive information on the

Government officials and tax collectors have found it difficult in obtaining the actual

amount of tax due by property owner and have little or no information regarding the actual housing characteristics.

The challenge was to assist the local authority to find ways of increasing the municipal revenue to enable investment in basic public infrastructures and services. Such assistance must be a cost effective approach to collect tax. This will involve the collection of up-to-date house hold level data for the whole area. Such data will consist

of a spatial database showing location of every building in Area “2”, as well as a property database showing details of housing characteristics. This will not only impose tax collection but also attract political support, thereby

enhancing development in the area.

STUDY AREA

The study area is roughly defined by UTM – 32 coordinates 332400.00E, 999200.00N; 332990.00E, 999151.10N; 332995.11E, 998836.74N; and 332313.85E, 998684.75N. It is located within the central area of Abuja along Moshood Abiola Road, linking Area “1”, “2”, “7” and Area “10”. Like any modern residential layouts the drainage channels are well laid out to take care of flood and sewerage problems. The study area has a total land area of approximately 21.2284 ha. 6

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DEVELOPMENT OF CADASTRAL DATABASE The Nigerian National Geospatial Data Infrastructure will lead to cadastral database for the whole Nation. Cadastral database is an essential component of the fundamental datasets of NGDI

[12]

. Up till this setting, these datasets have been produced by

different data providers. However, NGDI provides the framework for coordination and integration of cadastral data from various sources into core datasets for the whole country. This will improve our often-chaotic land administration. Other benefits include [12]: Increase in revenue from property taxation

Data for urban planning and development

Data for urban land use planning

Infrastructure development and maintenance

Data for housing policy and housing development

Data for crime monitoring and prevention

Data for educational planning and institutional development

National security.

Figure 1 below illustrates some users of the cadastral information [12].

Finance and Economic affairs

Agriculture Works and Transportation

Cadastral

Statistics and Demography

Database

Housing and Physical Infrastructure

Culture, Recreation and Tourism

Utilities Local Government

Environment

Administration

Figure 1: Users of the Cadastral Information [12].

DATASET AND METHODOLOGY The study is focused on providing geospatial information for property tax from the creation of a spatial database for Area â&#x20AC;&#x153;2â&#x20AC;? Abuja. This work entailed the use of a layout plan of the area due to the inaccessibility of these plots as well as the 7

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unavailability of high resolution imageries capable of depicting each and every property in the study area. 5.1

Dataset A layout plan of Area “2” was acquired in a soft copy format and was digitized using ArcGIS 9.2 software. Questionnaires were issued to every house-hold in order to acquire property and owners’ information. A geodatabase was created using Microsoft Excel 2007, and ArcGIS 9.2 software. The area in square-meters of each plot in Area “2” was then used to determine the tax rate.

5.2.1 Methodology

A reconnaissance survey was carried out to have a general picture of the study area. A questionnaire was then distributed to the residents of Area “2”. The data collected were

owner’s name, occupation, use of property, number of floors, floor area etc. The layout plan was then used in conjunction with data on the use of property to produce a land use type map (residential property, commercial property, religious property, etc.). Three tables were created in Microsoft Excel namely: Owner’s table, Property table and Beacon’s table. These tables were converted into dbase format for them to be recognized and used in ArcGIS 9.2. An ordinary digital camera was also used to capture the picture of each plot which was then linked up using the hyperlink feature.

The digital layout was converted to shape-file (i.e .Shp). The layers creation was done in ArcCatalogue using a personal geodatabase. The layers created were Residential plots, Commercial plots, Educational plots, Recreational plots, Religious plots, Streets

and Roads, and Green areas. Queries were made using the query wizard in the dialog box that appears when you click selection by attribute in the selection menu bar. The query expression was built by either typing it in or clicking on the required fields, operators and values in the dialog box that appeared. The area in (square-meters) was then multiplied by 200 naira to give an approximate amount to be collected by each plot for that year.

RESULTS AND DISCUSSION The figures below show the results of queries made for a number of properties and their results in map format (spatial distribution and representation).

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Queries on Commercial Property

Figure 1: Revenue due from commercial property

6.1

Figure 2: Spatial representation of commercial property. Figure 1 above shows the result of query carried out on commercial properties in Area “2”. Six properties were highlighted having sum total revenue due to be about N2, 402,855.45 while figure 2 shows their spatial representation.

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Queries on Revenue due from Property Owner

Figure 3: Revenue due from Dr. Suleiman S. O.

6.2

Figure 4: Spatial representation of property for Dr. Suleiman S. O.

Figure 3 above shows that the revenue due from Dr. Suleiman S.O. is N175, 902.20 while figure 4 shows the spatial representation of the property.

6.3

Queries on Property Exempted from Paying Property Tax

Figure 5: Property exempted from paying property tax 10 ISSN: 2230-7818

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6.4

Figure 6: Spatial representation of property exempted from paying property tax. Figure 5 above shows property being exempted from paying tax due to the fact that it is a property for religious purpose while figure 6 shows the spatial representation of the property. Revenue of Land Use Type Analysis

Table 1: The Revenue of Land Use Type Analysis NO

LAND USE TYPE

AVERAGE

NUMBER

AVERAGE

TOTAL

PERCENTAGE

AREA (ha)

OF PLOTS

REVENUE (N)

AREA (ha)

AREA (% ha)

182

184,533.17

33,585,036.87

16.7925

79.03

400,475.91

2,402,855.45

1.2014

5.65

338,124.45

1,352,497.80

0.6763

3.18

RESIDENTIAL

0.0923

COMMERCIAL

0.2002

EDUCATIONAL

0.1691

RECREATIONAL

0.0792

440,169.81

475,218.10

0.2376

1.12

RELIGIOUS

0.5053

2.38

GREEN AREAS

0.9177

1.8353

8.64

TOTAL

1.9677

198

1,363,303.34

37,815,608.22

21.2484

100.00

From table 1, Residential, Commercial, Educational, Religious, Recreational and Green areas make up the land use type in Area “2”. Residential plots have the highest number of plots of 182 with an average area of 0.0923 hectares and average revenue of N184, 533.17. Commercial plots have total revenue of N 2,402,855.45 but Religious plots are exempted from paying property tax. The total revenue due for Area “2” in year (2010) is N37, 815,608.22.

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CONCLUSIONS This study presents six classes of land use types (Residential, Commercial, Educational, recreational, Religious and Green Areas) in Area “2” Abuja with a total hectare of 1.9677 ha. Residential land use type contributed the bulk of the revenue from property taxation of N33, 585,036.87. It accounted for a total area of 16.7925 ha. From the queries made it showed that the revenue that will be collected for the year 2010 is in the vicinity of N37, 815,608.22. A digital layout plan of the area was provided showing the location of each and every plot in Area “2”. The geo-database was created using Microsoft Excel 2007, and ArcGIS 9.2 software. GIS is a very

useful and powerful tool in collection, storing, analyzing, querying and management of database. This system created allows for easy access, storage and retrieval of parcelbased record and enables easy update of cadastral maps and records. The Revenue to be collected in advance can be analyzed thereby enhancing decision making by tax

collectors. The system will also help to ensure that no properties are omitted from the tax rolls and that no properties are taxed more than once which was one of the major problems experienced in the property tax system being practiced. The revenue collection board needs to be linked to Geographical Information Systems (GIS) and an accounting system that will produce bills, monitor receipts and notify the need for action on arrears. The database could be uploaded to the web such that enquires could

be made on the Internet.

REFERENCES

1. Peter, F. D. Land Information Management, Oxford, New York: Oxford University Press, 1988. 2. Babalola, R. Gauge: Why we must Diversify Our Economy: Nigeria, Federal Inland Revenue Service. P.17, 2009.

3. Wikipedia. Property Tax. Retrieved from http://en.wikipedia.org/wiki/Property_tax, Accessed on 14-02-10, 2009b.

4. Jacobs, O. From Slum to Slum – A way out for Lagos State Government Retrieved from http://www.nigeriavillagesquare.com/articles/guest-articles/from-slum-to-slum-away-out-for-lagos-state-government.html. Accessed on 14-02-10, 2009. 5. Keith, S.H. A Practical Manual on Reforming Property Tax in Anglophone Africa. Technical Paper No.209. Africa Technical Department. Washington. D.C. World Bank. Retrieved from http://www.wds.worldbank.org/external/default/wdscontentserver/wdsp 12 ISSN: 2230-7818

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/ib/1953/10/01/000009265_3970311124317/rendered/pdf/multi_page.pdf. Accessed on 14-02-10, 1993. 6. Abhijit, E. A. Local Government Finances: Trends, Issues and Reforms of tax. Retrieved from http://wikipedia.org/wiki/property_tax. Accessed on 27-11-09. 1992. 7. Fisher, G.. Property Tax in the United States. EH.Net Encyclopaedia, edited by Robert Whaples. September 30, 2002. URL. Retrieved from http://eh.net/encyclopedia/article//fisher.property.tax.history.us. Accessed on 27-12-09, 2002. 8. Tim, J. and Robert, L. Developing a GIS at the Illinois Department of Revenue. Retrieved from http://proceedings.esri.com/library/userconf/proc95/to050/p049.html. Accessed on 14-02-10, 2009.

9. UN-HABITAT: UN-HABITAT gives Somaliland tax collectors a big boost. Retrieved from http://www.unhabitat.org/content.asp?cid=6514&catid=5&typeid=6&subMenuId=0, Accessed on 12-11-09, 2009.

10. Nieminen, J. Property tax based revenue collection GIS in the developing cities – a new approach for sustainable urban development. Retrieved from http://library.witpress.com/ pages /PaperInfo.asp?PaperID=653. Accessed on 14-0210, 2009. 11. Wikipedia. Database Creation. Retrieved http://en.wikipedia.org/wiki/Database_Creation, Accessed on 12-02-10, 2009a.

from

12. Igbokwe, J.I. and Ono, M.N. Nigeria’s National Geo-spatial Data Infrastructure: Problems and Prospects. Retrieved from www.fig.net/pub/cairo/papers/ts_31/ts31_07_igbkwe _ono.pdf. Accessed on 14-0210, 2005.

13. Ryttersgaard, J. Spatial Data Infrastructure. Commission 3 in Progress, FIG Working Week. Seoul. Retrieved from http:/www.uneca.org/disd/geoinfo/sdi_codi2.pdf. Accessed on 27-12-09, 2001. 14. Youngu, T.T., Isioye, O.A., Azua, S. and Jacob, R. J. A GIS Mapping of Farmlands in Sabon Gari Local Government Area of Kaduna State-Nigeria. Paper Presented at African Association of Remote Sensing for the Environment (AARSE) Conference: Addis Ababa (Ethiopia), Oct. 25-29, 2010.

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