Exemptions from local property taxation reduce the size of the tax base and either result in higher taxes on the remaining taxpayers or a reduction in the level of local services. Exemptions are also inequitable and inefficient. This paper examines the use of exemptions in the property tax laws of selected states across Nigeria. It examines the provisions for exemptions in the property tax laws of Lagos, Federal Capital Territory (FCT), Oyo and Edo states of Nigeria. Comparing with the Standards on Property Tax Policy – 2020, policy recommendations are made to minimize the erosion of the property tax base through extensive use of exemptions. These recommendations include the determination of property tax rates from municipal budgets, periodic review of exemptions to determine if they are still necessary and the need to make the owners of exempted properties in law apply for the exemptions with documentations. It is also recommended that Organizations that are qualified for exemptions can be encouraged to make Payment In Lieu of Taxes (PILOT) to assist local governments in raising more revenues to finance public infrastructure and services.
Umeh et al. (Tue,) studied this question.