EVOLUTION OF LOCAL GOVERNMENT ADMINISTRATION IN NIGERIA

In Nigeria as well as many other countries, local government precede any form of government various tribal, ethnic and family units existed as independent group managing their own local affairs long before the British administration was built or less an indigenous and develop as ultimately independent government. In this process the development of alternative in institution base on European models was irrelevant circumstances at the beginning of his administration which made indirect rule to the test solution; there was shortage of staff, lack of communication and little knowledge of the character and custom of people to issue. Pre-existing machine which were found to be organized therefore expediency bred indirect rule.

Nevertheless, the year 1941 mark a turning point of the constitutional development of the local government, the country which has been administered under a unitary system of government until 1947 was given a new constitution, that is the RICHARD constitution (1981:2), further  observed that in 1945 a conference of northern residents recommended the development of villages and district council to spread the contract between a native administration and the people this move by the fact that the resident that real influence and power of control over the native authorities.

The implementation of the recommendation marked of a more rapid development of the local government in the north. In south however, the number of people (men) elected into the native authorities.

Modern local government was given a new impetus on 1947 when Greece done, the secretary of state to colonels issued his serious dispatch to all governors of African territories calling for rapid development of local government which should be constructive role in political and social development.

ICAN (1997:84) states that the reform was a legislative land mark as first attempt to accord government the responsibilities.

The 1979 constitution  made provision for democratically elected local government to which function were assigned and for which it provide a state joint account into which federal and state were paid. From the above survey, it is clear that British and Nigeria alike tend to seek solution to the structure of local government based on English model.

 

THE ISSUES AND CHALLENGES IN SERVICE CHARGE ADMINISTRATION IN MULTI-TENANTED OFFICE COMPLEX

THE ISSUES AND CHALLENGES IN SERVICE CHARGE ADMINISTRATION IN MULTI-TENANTED OFFICE COMPLEX

CHAPTER ONE

1.0     BACKGROUND OF THE STUDY

The importance of property in daily commitment of human being is inevitable. The fact that property fulfils basic needs of mankind, there will be a strong demand for it to be met by the property manager. Property management according to Thorncroft (1974) is defined as:

“the executive function of planning, controlling, supervising, directing, organising and co-ordinating an interest in land and landed property with the aim of securing optimum returns which need not be financial only but may be in terms of social status, prestige, political powers, or other goals or group of goals”.

A facility manager plays an important role in the management and maintenance of property. In the case of leased properties such as multi-tenanted commercial properties, after playing the role of an Estate Agent, the valuer may be further needed by the client to monitor the physical condition of the property of which property maintenance is prominent in order to enhance its value and potentialities. Hence the task of managing and administering service charge on a multi-tenanted property comes in order to regulate physical and functional obsolescence and to enhance the utility value of service jointly used by the tenants e.g. lighting, cooling, lift, maintenance of garden etc and to bring it to an acceptable standard.

Service charge is therefore a means by which an owner is able to recover from the occupiers the cost of providing the services for the benefit of the premises. The service charge is structured such a way that the nature of the services provided varies with the type of premises e.g. office blocks, industrial/warehousing, shopping centers, High rises residential building, multi- tenanted commercial and mixed use properties. It has always been the challenge of facility managers to recover the money spent in some occasion when the landlord or the facility manager needs to rescue situation from getting out of hand.

Perroman (2013), sees service charges as the amounts levied on the tenants by the landlords to cover for extra facilities or services they may provide. These services may include provision of generator, general cleaning of the compound, installation of Air conditioners, gardening or general maintenance. In most new houses and apartments for rent, these service charges could reach up to fifty percent of the original cost of renting the apartment.

Service charge costs should be restricted to charges and associated administrative costs properly incurred by the owner in the operational management of the property including the reasonable costs of maintenance, repair and replacement (where beyond economic repair) of the fabric, plant, equipment and materials necessary for the property.

The position of the accountability of Facility Manager in the administration of the service charge has been a case for questioning and auditing. It is against this background that this study is designed to evaluate the issues and prospect in the administration of service charge on multi- tenanted commercial properties using Elephant Cement House, Alausa as a case study.

1.2       STATEMENT OF THE PROBLEM

Service charge as a means of recovering cost has been in existence for some time. Older leases often do not reflect current best practice. As new leases are granted and older leases renewed, it is essential to bring service charge clauses up to modern standards. This ensures that users of the property can operate transparently. If this modernization of the service charge provision of the lease results in an increase or decrease in the amount payable by the occupier, this would usually be reflected in the rent payable. It is unlikely that all leases will fall for renewal on the same date. Modernizing the service charges on an “as and when” basis may lead to a ‘dual’ service charge. Interim measures may therefore be necessary to ensure the practical operation of the services and the recoverability of the service costs during the intervening period.

Service charge administration is the means that enable the sharing of costs of common services in properties among multiple occupiers. There will be a manager who administers these services (for which he or she will receive a fee). Best practice requires services to be procured on a value for money basis and that competitive quotations are obtained for the supply of these services. The service charge will be on a ‘not for profit, not for loss’ basis.

This does not mean suppliers of services cannot make a reasonable profit on the services they provide (or manager(s) cannot make a profit on their management services) but the costs will be transparent so that all stakeholders; owners, occupiers and managers, are aware of how the costs are made up. Management fees should be transparent with no hidden markups.  The manager will issue budgets to occupiers with an explanatory commentary at least one month prior to the start of the service charge year and reconciliations following the year end to all users within four months of the year end.

However, the place of accountability where the service charge account is opened and managed by the facility manager needs a thorough investigation and consideration. These will be examined using Elephant cement House as a case study.

In view of the challenges inherent in the administration of service charge in multi-tenanted commercial properties, there are concerns by the stakeholders and decision makers. In recent times, a lot of landlords have lost their tenants because of the exorbitant service charges they levy on them. Aside from the fact that rent generally is expensive, service charges seem to compound the issue of the average person looking for affordable house to rent. The issue of high service charge is majorly predominant in houses on the Island and Ikeja area in Lagos. Considering the electricity situation and existence of businesses, the need to maintain a high profile environment arises, this would include the provision of these various facilities hence the extra charges.

1.3       RESEARCH QUESTIONS

Thus when dealing with research study of this nature, the following research questions are postulated:

1. What facilities/services constitute service charge in Elephant Cement House, Alausa, Ikeja? 
2. What are the processes and procedure for the apportionment of Service Charge in the subject property?
3. What are the issues and challenges involved in the process of administration by the property manager and the tenants in the case study?

4. How adequate is the maintenance structure put in place in Elephant Cement House?
5. What is the level of efficiency in the administration of service charge in the subject property?

1.3     AIM AND OBJECTIVES OF THE STUDY

The aim of this study is to evaluate the issues and challenges in service charge administration in multi-tenanted office complex with particular reference to Elephant Cement House, Alausa, Lagos, with a view to ensuring effective service charge delivering system.

In achieving this aim, the objectives are to:

1. Identify the facilities that constitute service charge in Elephant Cement House, Alausa, Ikeja,
2. examine the process and procedure for service charge apportionment,
3. investigate the issues and challenges involved in services charge administration in the study area,
4. examine the adequacy of the maintenance structure put in place in the subject property and,
5. evaluate the level of efficiency in the administration of Service Charge within the subject property.

1.4   SCOPE OF STUDY

In order to achieve a precise and concise analysis as well as deviating from the specific objectives of the study, the scope of the analysis is limited to service charge administration in Elephant Cement House, Alausa, Ikeja, Lagos being one of the well known multil-tenanted property in the Central Business District of Lagos State.

The subject property is chosen as a result of its multi-tenanted nature and neighbourhood characteristic. It would be able to provide richer information and data needed for the evaluation of service charge administration as a reference point for other commercial multi – tenanted properties within Lagos metropolises.

Besides, in terms of vertical depth, level of efficiency of the administration, issues and challenges confronted by the service charge administrators and adequacy of the maintenance structure in the Elephant Cement House, Alausa, Ikeja

1.5 JUSTIFICATION OF STUDY 

This study is necessary at this time when government and investors are talking about infrastructural development. What will readily come to mind is how do we maintain facility? It is certain that multi tenanted buildings without service charge administration always become shadow of itself. We need to analyse the effect of the traditional challenges and modern ones. Several Scholars had looked into different aspect of this study;

Pargma (2004) among others – examines in depth the often -contentious issue of service charges from the occupier’s perspective. The intention is to explain what should and should not be recoverable for the repair and maintenance and the provision of vital services, usually within multi tenanted buildings.

Nwankwo (2004) identifies the need for a service charge administrator and the expectations of the property owner.

Service charges are a matter of growing interest within the commercial property sector, resulting in an increasing number of initiatives designed to better understand and constructively determine practical steps to improve the management and administration of such expenditure. The relative size and importance of the commercial service charge market is now clearly understood and there is increasing support from occupiers, landlords and managing agents for improvements in best practice within the industry. (The Service Charge Operating Report 2010/11 (SCOR) on commercial service charges).

This study is therefore necessary to bridge the gap between what had earlier been studied and the current development in the built up industry, examining the responsiveness of the property manager to issues and analyzing the performance level in times of accountability of the property manager. It will also help us as professional on how to avoid the pitfalls in service charge administration as people are becoming more aware of the Importance of service charge in multi-tenanted buildings. It will also help in sharpening proper policy direction in facility management that conforms to international best practices.

1.6 THE STUDY AREA:

Fig: 1   Elephant Cement House, Alausa

The subject property is owned by LAFARGE Cement WAPCO Nigeria Plc. (WAPCO) – LAFARGE Worldwide formally known as West African Portland Cement Company (WAPCO).  It is a commercial property known as Elephant Cement House comprising main building on eight floors with pent house, occupying a parcel of land known as Block H, Portion 01, Central Business District, Ikeja, Lagos State.

The referenced Central Business District where the property situates is accessible through a right turning off Obafemi  Awolowo Way precisely at Elephant/Cosmic Bus Stop, opposite Ikeja Mall (popularly called Shoprite) when approaching from Alausa en-route Awolowo Way. The subject property is located on the right hand side of Assbifi road behind Skye Bank Plc.

Alausa is a locality in Ikeja local government of Lagos State, Nigeria. It is the seat of the Lagos State Secretariat and offices of the Governor and Deputy-Governor of Lagos State. Alausa also has a vibrant and growing Central Business District with several multinational business concerns like Cadbury Nigeria Plc and many others having their offices located in the area. It also has many low density residential estates like the Cornerstone Estate; MKO Abiola Gardens located within it.

The neighborhood is majorly commercial in nature. Notable landmarks available within the neighborhood include; Skye Bank Plc, Assbifi House, Alausa Secretariat, Central Mosque, LTV House, Ikeja Mall (harboring Shoprite) amongst others. Infrastructural facilities available within the neighborhood include mains electricity, water, telecommunication services and a network of good roads.

The Accommodation afforded by the property comprises a total of 12,320.48m² lettable floor spaces. The property is occupied by a total of 40 companies including Lafarge and the tenancy period of all the occupants’ runs from 1^st January – 31^st December Annually.

AN APPRAISAL OF THE ADMINISTRATION OF PERSONAL INCOME TAXATION

AN APPRAISAL OF THE ADMINISTRATION OF PERSONAL INCOME TAXATION

A CASE STUDY OF ABIA STATE BOARD OF INTERNAL REVENUE

CHAPTER ONE

INTRODUCTION

1.1   BACKGROUND OF THE STUDY

In developed and developing countries there are wide range of taxes and levies that affect individuals and companies, citizens and foreigners, manufacturers and marketers, workers and pensioners . In Nigeria taxes range from petroleum profits taxation to tenement rate imposition, and taxes are imposed at different levels to enable the government provide certain essential services and facilities to the population. Some of the issues involved are legal, economic, others are political, sociological, while others are historical.

The study will begin the appraisal by examining related taxes and levies applicable in Abia State and the legal instruments governing them. The government plays the piper and dictates the tune. Ogundele (1999:8) states that government intervention in an economy takes many forms. The degree of intervention differs from country to country, depending on the form of political model adopted in the governance of the country. The intervention referred to is tax, which in a well planned economy affects every aspect of human endeavour. On the subject of intervention which differs from one form of government to another, and the form of intervention, they either intervene for the wrong reason or adopt the wrong strategies when intervention is justified. Mbanefo (1999:21) posits that the implications of government tax intervention are many and will be expatiated in this study.

Anyanwu (1997:18) opines that fiscal administration is tax policy making and collection as well as expenditure programming at all levels of government. It involves the controlling, organizing, directing, monitoring, planning and management of government revenues and expenditure. Furthermore, the long term role of fiscal administration is to collect all registered taxes at minimum cost, as well as execute government programmes as efficiently as possible by avoiding waste.

1.2   STATEMENT OF THE PROBLEM

Among the many problems confronting tax administration in Abia State, is how to ensure voluntary compliance on the part of the tax payers. Tax being a commodity nobody want to buy, the tax man is hardly liked by tax payers who perceive him as government toll collector. The problem of the tax man is worsened by poor performance of most state governments in terms of provision of amenities for the tax paying public. Lack of confidence and mutual distrust in government represented here by the tax man, gave rise to voluntary compliance difficulties.

Tax laws in Nigeria are complex and difficult for the common taxpayer to understand, and some cases are problematic even for literate official. In addition to lack of understanding, many taxpayers are unaware of the existence of certain tax. This couple with the lack of information, laziness of the tax official, uncooperative taxpayers and the habit of ‘quick –fix’ solutions-encourages the use of the best judgement approach. This may be a manifestation of the poor tax education and weak fulfillment by tax authorities of their responsibilities with regard to public awareness.

Ocheoha (2000) asserts that tax is a commodity nobody will want to buy if buyers are given the opportunity of choice because tax is an imposition. He explains that government imposes taxes primarily to raise the revenue required to cover the cost of general administration and defense. He contend that the cost of general administration includes paying of personnel emoluments, salaries, wages of leaders or those in authority, their aides, as well as the salaries of civil servants, police and military personnel.

Today the purposes of taxation have assumed a wider dimension hence the government uses it as a veritable tool of administration. Therefore, the status and standing of taxation as a subject worthy of study cannot be overemphasized. Abudulrazaq (2002) asserts that the way Nigerian taxation should be studied and practiced remains a broad and demanding one. He suggested there must be technical competence with a positive group of primary sources that the competence can be tested in many ways regarding form, elementary computation to planning transactions. Tax is imposed by those in authority for a variety of reasons and charges. Musgrave (2004) posits that taxes and charges are withdrawn from the private sector without leaving the government with liability to the payee. However, tax is a compulsory imposition, whereas charges and borrowing involve voluntary transactions. In other words, a major distinguishing factor of tax from other charges is that tax is not a quid proquo expenditure, thus implying that a tax payer should not demand or expect a commensurate exchange of goods or services for the tax paid.  

In view of the above, this study will attempt to answer the following questions which form the bedrock of the problems raised by the study.

1. What classes of people are liable to which type of taxation and what is the level of their compliance to the personal income tax in the state?
2.  What is taxation, and what purposes does taxation serve?
3. How have multiplicity and duplication of taxes, levies by the other levels of government made the administration of personal income tax by Abia state difficult?
4. High level incidence of corruption in the administration of personal income taxation gave rise to increased tax evasion, avoidance and ineffective and inefficient personal income tax administration in Abia state.

Noticeable inefficacy as evidenced in the increasing number of tax defaulters, evasion and avoidance are attributable to corruption and other vices in the administration of personal income tax in Abia state.

1.3   OBJECTIVES OF THE STUDY

The objectives of the study are as follows:

1. To review out, in detail, the operations of personal income tax in Abia State in order to establish their success or otherwise in the generation of revenue for Abia state government.
2. To ascertain the meaning and nature of tax, especially the context of administration of personal income taxation in Abia State.
3. To determine which and what income are liable to tax and the level of compliance by those who are liable.
4. To identify the factors that impinge on the effective administration of personal income tax in Abia State.

1.4   SIGNIFICANCE OF THE STUDY

Practically the study will assist the Abia State Board of Internal Revenue in positively administering their responsibilities in raising revenue through personal income taxation and conducting other tax duties.

It will also help policy makers in adopting appropriate policy on tax personal income tax and sanctions against violation or evasion of taxes by individuals, groups or companies. It will also help the officers of the Board of Internal Revenue to adopt new strategies in ensuring compliance of individuals, groups and companies in fulfilling their responsibilities as citizens of the country.

Theoretically, it will help in the education of the management, administrators and tax officers on the need for continuous tax assessment towards increasing the revenue base of the government. It will also assist in the education of the general public and tax payers on the need to carry out their responsibility as citizens of the country.

The study will be of great importance in providing information to readers, especially those involved in financial administration to gain knowledge on the administration of personal income taxation.

It will increase the data base for scholars and practitioners interested in the field of revenue generation through personal income taxation.

Finally, it will serve as a reference point to scholars, and students who want to conduct research in future in the field.

1.5   SCOPE AND LIMITATIONS OF THE STUDY

The scope of this study covers only the staff of Abia State Board of Internal Revenue. The senior staff from grade level 10 and above, will be considered from other ministries and agencies of government for this study.

Some factors that constituted hindrance to success of this work include the following:

The time this study is expected to be completed is very short compared to the enormous work involved.

Limited financial resources also constituted a hindrance to the success of this study. A lot of money was required for transportation to various branches and zones of the Board of Internal Revenue.