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Lagosians, state government explain stands on land use charge

Director, Nigeria Employers’ Consultative Association (NECA), Timothy Olawale (left); Lagos State Commissioner for Industry, Commerce/Co-operatives, Olayinka Oladunjoye; President, Lagos Chamber of Commerce and Industry (LCCI), Babatunde Ruwase and Lagos State Commissioner for Finance, Akinyemi Ashade, during the LCCI stakeholders’ dialogue on the new Lagos Land Use Charge law in Lagos… at the weekend. PHOTO: FEMI ADEBESIN-KUTI

Lagos State government is pushing hard to gain the trust of the citizens of the state to accept the new land use charge law, but the people are pushing back to have the law reversed.

The state government invited editors and reporters to a meeting at the weekend where it explained the justification for the new law.

The state’s Commissioner for Information and Strategy, Kehinde Bamigbetan, told journalists at the meeting that Lagos needs to increase internally-generated revenue to close the infrastructural gap, which the government estimated at N14.47 trillion.

He said meeting this need could only happen when people pay a tax that is realistic.

The commissioner emphasised that the government planned to do this without inflicting pain on the residents.

According to him, the government would protect tenants from “shylock landlords” through the instruments of the new Lagos Consumer Protection Agency Law, Lagos State Tenancy Law and Lagos State Public Defender Law.

But it is uncertain if government will keep to its words considering weak enforcement of the tenancy law, which was enacted in 2011.

Till date, the act remains a good law on paper as Lagos landlords continue to violate the law by demanding rents in excess of one year from prospective tenants.

The landlords also demand or receive rent in excess of six months for a monthly tenant, or one year from a yearly tenant without sanction.

At another forum, Lagos State Commissioner for Finance, Akinyemi Ashade, said obsolete tax regime enacted in 1984 needed to be reviewed because only a small fraction of taxable property was actually remitting Land Use Charge to the government.

According to him, the state government receives only 50 kobo for every survey plan lodged at the surveyor-general’s office/land bureau while surveyors have already increased their rates.

“The state’s huge infrastructure deficit, inherited external loans and deficit financing agreement need to be financed despite the low tax-to-GDP in the state,” he argued.

Ashade, however, said that various reliefs had been made available to payers, including a general 40 per cent relief for all property liable to LUC payment.

The new law, he said, also established an assessment appeal tribunal which was authorised to adopt the use of Alternative Dispute Resolution (ADR) in resolving disputes concerning LUC demand notice, provided the appeal was lodged within 30 days after the receipt of the notice.

But doubt still exists, and that leaves Lagos in a situation yet unsettled.

Also, the data presented by the government says crisis in the North-East region is equally causing a high migration of people to Lagos as the state records an average of 86 people per hour migration.

But Lagosians have insisted that the law that shot up the Land Use Charge by 400 per cent is “unfair” because it does not reflect the reality of the current economic condition.

Therefore, the Nigerian Bar Association (NBA), Ikeja Branch, has given the state five-day ultimatum, which will end today (Monday), to reverse the law described as “Hell Tax”.

Also, residents of the Lekki Peninsula have also decided to approach the Lagos State Land Use Appeal Tribunal to stop the bill served on them under the new law.

In fact, the coalition of all resident associations along Lekki-Epe area has resolved not to pay the new charges, and has communicated the instruction to all members.

At a stakeholders’ forum held last Friday, Organised Private Sector (OPS) also condemned the new tax law. The OPS wants a downward review of the tax on property without delay.

The fear of many is that by the time state government makes good its promise to review all the extant laws in a bid to improve its revenue generation profile, Lagos residents may have to pay more in taxes and fines beyond the revised Land Use Charge law and the new motor vehicle registration rates.

For instance, Lagos State has disclosed in February that the automation of consumption taxes would soon be implemented while the physical planning permit and survey fees, among others, will also be reviewed.

This, no doubt, will put a bigger tax burden on the people.

There are other groups that criticise the Lagos government for asking Lagosians to pay more without demonstrating transparency and accountability in its budgeting.

BudgIT and Socio-Economic Rights and Accountability Project (SERAP), civic organisations that promote transparency and accountability in public spending, have been campaigning that Lagos should keep its book open, without success.

The two organisations wrote to Lagos State in June last year asking for a copy of procurement journal prepared by the Lagos State Procurement Agency from 2012 till date, but that request has not been granted.

Despite the Lagos High Court ruling that Freedom of Information Act (FoI) – the law that guarantees the rights of citizens to access public information, including detail of the budget – applies to Lagos, the state continues to refuse FoIA request to publish comprehensive budget unlike other states in the federation.

Also, Lagos State Public Procurement Agency Law Section 9 (xi-xii) mandates that: “the public procurement agency is obligated to publish the details of major contracts in the state procurement journals and publish both paper and electronic edition of the state Procurement Journal and (xii) Procurement Manual while maintaining an archival system for the state procurement journal.”

But contrary to the provision of the agency law, the award contracts on the agency’s website (http://www.lagosppa.gov.ng/awarded-contracts) has remained unchanged for nearly two years with the phrase “coming soon!”

There has never been an upload of any of the procurement journals as required by the provision of the act.

Though the government has invited residents to visit (https://citizensgate.lagosstate.gov.ng), the platform that publishes activities of Lagos and collects feedback from the people, vital information is missing on the platform. Relevant data such as the list of Certificate of Occupancy (C of O) issued by the state since 2001 when the land use charge law was enacted is missing. Only the list for 2015, 2016 and first quarter of 2017 are available on the website.

“The resistance of the Lagos government to open its book to the public is a good ground to question the state’s decision to increase tax, BudgIT Founder, Seun Onigbinde, argued on Facebook.

Also, the OPS and many citizens have queried the alleged collusion between the executive and legislative arms of the state in the enactment and implementation of laws, which they concluded lack public appeal.

Indeed, questions were raised on the Cleaner Lagos Initiative bill and most recently, the revised Land Use Charge law. The OPS claimed that the state did not give a fair hearing to them, arguing that considerations and concerns raised by members were ignored. The lack of stakeholders’ support under the new arrangement has been attributed to the failure of the initiative, thus leading to a dirtier environment in the state.

The state, on the other hand, has alleged sabotage by former PSP operators under the Cleaner Lagos Initiative.

The group described the public debate organised on the bills, that later became laws, as a charade.

The OPS, comprising the Lagos Chamber of Commerce and Industry (LCCI), Manufacturers Association of Nigeria (MAN), Nigeria Employers’ Consultative Association (NECA), National Association of Small and Medium Scale Enterprises (NASME), among others, also stated that sanctions for defaulters in the reviewed Land Use Charge (LUC) Law of Lagos is severe and not in tandem with democratic ideals and norms.

Timothy Olawale, who spoke on behalf of NECA, said that while the government could exercise its right of review of the LUC, its negligence to review the law in the past should not be brought to bear on residents through astronomical review of the LUC.

“We are not averse to an increase in LUC but in welcoming the review of the LUC law, any increase above 100 per cent which actually amounts to doubling the current rate, is not acceptable,” he said.

President of LCCI, Babatunde Ruwase, during a stakeholders’ forum stated that while many citizens are willing to pay as shown by the records of payment, the capacity to pay has dwindled for others considering the slow recovery from the economic recession, which impacted negatively on income and consumer purchasing power.

“There would be instances where the citizens are willing to pay, but just do not have the capacity to pay, given the state of the economy.

“The Nigerian economy is only just gradually recovering from the recession. Many companies are yet to return to profitability.

“Industrial capacity utilisation has declined, purchasing power is still very weak and the occupancy rate in many commercial and residential property are still very low.

“All of these have adversely impacted the returns on investment in the property market and points to the fact that current market value of a property may not necessarily reflect the rental income for the property,” Ruwase said.

President of the Manufacturers Association of Nigeria (MAN), Dr. Frank Jacobs, wants the state to review the law.

“Our recommendation to government is that when you come out with a law that is not popular, go back to the drawing board. If they had come up with a 30 per cent or 100 per cent increase with justifications, there won’t be an agitation and outcry. They should go back and do it right.”

He warned the government from preparing ambitious budget that is unrealistic, saying: “People should produce a budget in line with what the income can be. You don’t project something and kill the people paying the taxes. It is unfair.”

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LagosLand Use Charge
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