Land Use Charge: Why review by Lagos govt. is useless — Building industry operators

Governor Akinwunmi Ambode of Lagos state
Governor Akinwunmi Ambode of Lagos state [Photo credit: Instagram - akinwunmiambode]

Some operators in the building construction industry on Saturday joined in showing dissatisfaction with the level of reduction in the Land Use Charge (LUC) announced by the Lagos State Government.

They spoke with the News Agency of Nigeria (NAN) in Lagos.

The state government, following public outcry on its hike in the charge, had on Thursday announced various reliefs, with some reduction.

But several groups have continued to express dissatisfaction, adducing various reasons for their positions.

Olayemi Shonubi, vice president of the Nigerian Institute of Quantity Surveyors (NIQS), told NAN on Saturday that the government had not justified the review, which affected only few sections.

According to him, the reduction will make no economic impact if a wholesome amendment is not made to other sections of the law on the charge.

He said this was necessary considering the requests of the stakeholders, landlords and professionals in the sector.

“Let the entire LUC law be taken back to the House of Assembly for complete overhaul, review and amendment, such that the rate of reduction, penalities removal, installmental payment and conditions may be enacted into the law.

“It is only when the law is wholesomely reviewed to meet with value of the property over time, that it will be of economic importance to the residents of the state.

“Otherwise, the masses will just be living at the mercy of the government because successive governments may come up with different policies in respect to the law at will,” Mr. Shonubi said.

Samuel Effiong, former chairman of the Nigerian Institution of Estate Surveyors and Valuers (NIESV) Lagos Chapter, said the review of a law as important as the LUC should not be done with a fire brigade approach.

Mr. Effiong said the state government reviewed the charges in haste and as such did not carry out proper analysis, study and consultations.

According to him, the needed fundamental adjustments to the law have not been made.

He said that evaluation of property taxes were not based on capital value, but on income value of the property.

“The government needs not to be in hurry in amending this law.

“They should do the necessary consultations, sit down with the estate surveyors and valuers to properly study/assess the law and work out the modalities for applying it,” Mr. Effiong said.

Makinde Ogunleye, former Chairman, Nigeria Institute of Town Planners (NITP), said it would further jeopardise the economic system for the state government to pursue an increment at a time the country just came out of recession.

Mr. Ogunleye said it was not the right time for any form of taxation increment.

He said that if the government wants to raise more revenue, it could do so by looking at other areas.

According to him, considering the economic situation in Nigeria today, the government must have sympathy and empathy for the people.

He noted that imposition or addition of any payment of money on citizens now could be exposing them to avoidable pains.

“The state government has so many other ways of generating revenue. Lagos State has a lot of industries.

“Let the state government target the rich and not the poor because increment in LUC will affect everyone; the poor, the average income earner and the rich as well.

“Let them target the extremely rich, the high-end industries, commercial ventures, and not those who are struggling to survive,” Mr. Ogunleye said.

The Lagos Government had recently repealed its 2001 Land Use Charge Law and replaced it with a new Land Use Charge Law, 2018, which was signed on Feb. 8.

Based on the law, new rates were sent to property owners and those who received the bills stated that the LUC represented an increase of between 150 and 400 per cent over the 2017 rate.

The LUC Law which was meant to increase the state’s internally-generated revenue and expand its tax base, generated controversy among the public.

In response, the state on Thursday announced a review, in which Commercial Property Owners were granted 50% discount.

Property Occupied by Owner and Third Party & Property Used for Industrial and Manufacturing Purposes were given 25% discount.

Owner-occupied Property will also get 15% discount.

The penalty regime for late payment of LUC was also waived.

Other rates and reliefs, apart from the ones stated above, however remain unchanged and will be implemented as stipulated by Law, the government said.

It said owners of Property across all categories will now be allowed to make payments by installments, to reduce the burden of taxation on citizens.

It said those who had paid the original amount will be awarded tax credits to the extent of the excess amount paid and carried forward to next year.


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