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Tag: Land Use Charge

  • Lagos Land Use Charge: Breaking the eggs to make an omelet

    Several decades ago when the great Tai Solarin wanted to establish the nexus between painful sacrifice and  break throughs, he reached for a famous saying he credited to Jawaharlal Nehru, India’s illustrious first Prime Minister. “You cannot make omelets without breaking eggs,’’ he said, ‘’throughout the world, there is no paean without pain.’’ Simply put according to the Oxford Advanced Dictionary, ‘’you cannot achieve something important without causing a few small problems.’’ And the late Solarin added: ‘’The biggest successes are preceded by the greatest of heart-burnings…All that is noble and laudable (is) to be achieved only through difficulties and trials and tears and dangers. There are no other roads…Our successes are conditioned by the amount of risks we are ready to take.’’

    Yes, that is the gargantuan risk Governor Akinwunmi  Ambode is taking through the Land Use Charge he has initiated in Lagos in order to bring present and future development to the citizens. He must break the less satisfying and short-lived eggs of inadequate infrastructure to cook the more delicious and fulfilling omelets. Naturally between an offer of ordinary egg and a dish of omelet, most would opt for the latter, given its exciting culinary experience.

    That’s the point of the Lagos State Government which I think we must understand. We need this understanding in the narrative so we all can be part of the new Lagos in the making. The fact of a state that has been captured as the fifth largest in Africa comes with so many other indices of development and growth: burgeoning population, decaying public facilities, unplanned outer city settlements, overworked transportation system, frightening crime statistics, chaotic market profile and a host of other indicators of the typical city centre in a developing country.

    Recently an international observatory body projected that this former capital of Nigeria would leap from its present population of about 20 million to around 35 million in 2030. Without a scientific study giving any prognosis, we can conclude, not assume, that Lagos of the future would be a bedlam if the authorities of the day do not move fast to abort that fast approaching future. Of course a disastrous accident waiting to happen can be avoided if the right steps are taken.

    This is what makes the difference among leaders. There are those who live in the shell of the present and avoid preparing for the future. History is always unkind to them. But real leaders (also addressed as statesmen) are those who have a foot in the future, indicating they have respect for the generations that would succeed the present. History accords them corresponding attention in the record books.

    I believe Ambode isn’t oblivious of the opposition that would come with asking property owners to swallow the pill of Land Use Charge Act of 2018 which annuls a previous one that had been in existence since 2001. Under it there are multiple rate increases of up to about 400%. There has been an uproar. Landlords say the revised law will make them tenants in their own homes while tenants complain their landlords will pass on added charges to their rents. Another grievance is that government didn’t consult stakeholders nor embark on wide enlightenment prior to announcing the new deal. There is also the charge of insensitivity against Ambode: he is accused of bringing on the new law at a time of inclement economic conditions.

    They appear not to be moved by government’s stand that it needs to enlarge its income via a modern and improved tax regime to meet dire challenges which the current revenues can’t cater for. The key issue is to tackle the infrastructure shortfall estimated at nearly N15 trillion. Oil proceeds can’t offer any succor. Neither can the traditional handouts chip in long-term solutions. Foreign aid wouldn’t do either. Massive borrowing would be counterproductive as it would enslave the future before its arrival.

    The way out is to look inwards and tap from the resources of the people through ingenious administration hallmarked by the body language of officials the public can trust with their political mandate and hard-earned money.

    To be sure Ambode can be relied on to use public wealth put in his care to position Lagos for the future. In less than three years he has changed the landscape of this city-state, building roads, rehabilitating them and erecting flyovers and interchange terminals that remind you of some exotic cities in Europe.

    Early this week observers saw one more reason to believe Ambode in his quest to seek the people’s tax to provide development for the state. In the ardor of the controversy over the new tax regulation, with some critics asking for its outright revocation, the governor gave cheering news to newsmen who cornered him after an event. He revealed himself as a listening leader who would gladly review any policy in the interest of his people, including the law in question.

    After insisting that the Land Use Charge Act is targeted at fast-tracking development and protecting the future of the state, Ambode said: ‘’…a responsive government will listen to the yearnings of her people…At the end of the day, it’s all for the development of Lagos. What this government is interested in is to create a trajectory and framework of permanent prosperity for Lagos. It s about the future and if there is going to be permanent prosperity in Lagos, some things have to be done but I can tell you based on the dialogue and the things we have been receiving, obviously we would respond positively to those yearnings.’’

    And only a few days after that declaration, Ambode walked the talk when he reduced tariffs of the Land Use Charge by 50% and waived fines late payment of charges. He took the decision following concerns expressed by Lagosians. It is rare in the history of Nigeria for a governor to so reverse himself in a major policy issue.

    It is a dramatic signal that we are living with a government that listens and cares.

    It’s left for us to cooperate with a man who has demonstrated uncommon courage by introducing a tax increase for our security now and for children where others might for temporary gain be cocooned only in the comfort zone of their offices. He has also said he is ready to take a look at gray areas in the interest of good governance.

    Let’s break the eggs and make the omelet our people deserve. We’ll bear with the price and sacrifice and heat in the kitchen in the hope that the inconvenience will give way to a prosperous future.

     

    • Anibaba writes from Lagos

  • Lagos govt slashes Land Use Charge

    THE RATES AFTER REVIEW

    •Commercial property 50%
    •Owner-occupied/tenant 25%
    •Purely residential 15%
    •General relief 40%
    •Persons above 70 10%
    •PLWD above 25 years 10%

    The Lagos State government yesterday announced a 50 per cent downward review for commercial properties and other waivers on the Land Use Charge (LUC) it introduced last month.

    This followed the public outcry against the law.

    Commissioner for Finance Akinyemi Ashade announced the reduction at a media briefing in Alausa, Ikeja, the state capital.

    He said the review of the amended LUC Law 2018, which was received with mixed feelings, followed widespread dialogue with stakeholders, such as the organised private sector (OPS), the Nigeria Bar Association (NBA), real estate investors and developers, landlords and residents’ associations, community development associations, civil society organisations (CSOs), Lagos Chamber of Commerce and Industries (LCCI), Nigeria Institute of Estate Surveyors and Valuers as well as several other professional groups.

    Ashade said: “As a government that is committed to the welfare of its citizens and which understands the importance of continuously engaging the populace, the Lagos State government took this important decision for the good of the people.”

    Giving a breakdown of the review, the commissioner said commercial property owners would be granted 50 per cent discount.

    This means a commercial property valued at N20 million, which was earlier billed N91,200, will attract N45,600 per annum.

    For properties occupied by the owner and a third party, and properties used for industrial and manufacturing purposes, a 25 per cent discount applies.

    This means a N20 million property, which was expected to pay N30,720 before the review, will pay N23,040 per annum.

    Also, owner-occupied properties will now enjoy 15 per cent discount; meaning that a N20 million property, which was previously charged N9,120, will now pay N7,752 per annum.

    Ashade said the penalty regime for late payment of LUC had been removed, hinting that the new relief also accommodates flexible payment by instalments to reduce the burden of taxation on residents.

    The commissioner said other rates and reliefs would remain unchanged and be implemented as stipulated in the law.

    These include the 40 per cent general relief; 10 per cent discount for persons of 70 years and above; 10 per cent for properties owned by persons living with disability and 10 per cent for properties that are 25 years old.

    Ashade said due to the new measures, those who have paid the original amount will be awarded tax credits to the extent of the excess amount paid and carried to next year.

    Ashade said: “We appreciate you for trusting the current administration with the responsibility of investing the revenue from LUC in infrastructure renewal and overall development of our state. We promise we will continue to make your tax work for you.”

    The Executive Director of the Centre for Public Accountability (CPA), Femi Lawson, hailed the Akinwunmi Ambode administration for listening to the people.

    He said: “This review shows a government that shares in the pains and concerns of the citizens of this state. Not only did they listen to our agitations but also took action to allay our fears and worries by bringing the LUC rates down and introducing some other tax burden relief measures. This is surely a pro-people government.”

    A real estate investor, Thomas Aderinola said the downward review of the amended LUC was an indication that the state government listens.

    He praised the government for introducing some other waivers, such as payment by instalment and the newly set up “People’s Tribunal” to resolve LUC payment cases.

    Aderinola added: “With developments like these, we will be happy to show our commitment to the growth of Lagos by paying our taxes as at when due.”

    Lagos State Sports Council Director-General Babatunde Bank-Anthony urged Lagosians to be wary of people hoping to score a cheap political point with the Land Use Charge.

    At a meeting of the Strike Team at the Teslim Balogun Stadium, Bank-Anthony said anyone above 65 years is not expected to pay the Land Use Charge.

    He added: “The Land Use Charge is not for anybody above 65 years – landlord or tenant. It is for those who have commercial property. Don’t let anybody deceive you.”

     

  • Taxation: what reduced Land Use Charge means for Lagos residents

    The Lagos Land Use Charge, which was reduced yesterday, was created to get more properties into the tax net and increase revenue available for development. It was also meant to standardise property valuation on which charges are calculated and improve property enumeration across the state. After several debates, the Lagos State Government cut the rate payable for commercial properties by 50 per cent. COLLINS NWEZE writes that the gesture is significant and commendable.

    Taxation is at the heart of development in most great economies. Lagos State Government has been in the eye of storm ever since it commenced distribution of demand notices for the payment of Land Use Charge for 2018.

    Many property owners expressed surprise at the figures they saw in their bills. According to reports, many property owners were shocked to find increases of up to 400 per cent on the bills they paid only a year ago.

    Speaking on the development, an economist and tax expert, Osebumere Odia, said the Organised Private Sector (OPS), the segment most hit by the increases immediately went on air to vehemently protest these increases. “Anyone who was present at the Town Hall Meeting organised by the Lagos Chamber of Commerce and Industry could not have missed the passion with which the representative of the OPS criticized the new land use charge regime. “Any increase above a hundred per cent,” he stated very forcefully, “is unacceptable,” he said.

    But nowhere was the “war” as violent as cyberspace. Across various chat-groups, different people gave their own interpretations to the developments. Odia said it was the gross misinformation on cyberspace more than anything else that befuddled the arguments of the government making the communication process increasingly arduous.

    Government through its operatives including the Governor of Lagos State, Akinwunmi Ambode, had argued that the increases in land use charge had actually been sequel to the repeal of the 2001 Law and passage of a new Land Use Charge law by the state house of assembly. The review, it said, had been predicated on a need to bring obsolete charges up-to-date, standardize the practice of property valuation upon which charges are calculated, as well as ramp up property enumeration across the state and in the process bring more properties into the tax net.

    Government had also explained that the taxation approach being employed was progressive one, wherein the poor are less affected than the rich. In fact it added that the majority of properties, comprising some 75 per cent, were actually valued below N10 million implying that all they would need to pay would be N5,000 annually equivalent to some N417 per month.

    It had further stated that among the other 30 per cent, majority of properties were valued under N20 million, in which case tax liability was actually relatively low. It further demonstrated that for a property valued at N20 million for instance, an owner-occupier would not need to pay more than some N9,120 on an annual basis.

    Opposition to the new charges, however, remained very vehement, waning slightly with better education. According to Odia, agitation against the increased land use charge was not without basis. Many young people argued that the increases would merely provide a convenient cover for landlords to arbitrarily hike their rents.

    Members of the OPS also lamented that the taxes could cripple the operations of their members already reeling from the difficulties in the operating environment. It is instructive that despite its good intentions which it laboured to explain to Lagosians, the Ambode led administration still listened to the agitations and has lately made concessions. Ambode, while addressing a high caliber meeting of the OPS last week had hinted that government “was ready for dialogue” in response to the wave of criticism that had greeted the dissemination of demand notices for land use charge.

    Before then, he had explained the rationale for the increases especially against the backdrop of the infrastructure challenges that Lagos is beset with in the face of its rapidly growing population. The infrastructure gap in Lagos, Ambode explained, is in the region of $50 billion. To put this in context, he explained that even if the entire 2018 budget for Lagos were to be deployed to infrastructure alone, it would take another 15 years of such regular investment for the infrastructure in Lagos to get up to speed (assuming of course, that the population growth is stagnated).

    He also explained that the tax regime was actually very pro-poor, highlighting the fact that it was imperative to deploy tax revenues gotten from such progressive taxation, to creating job opportunities for the poor to enhance social security.

    The popular view, however, appeared to be that the taxes were on the high side and it is commendable that rather than refuse to bend, Ambode has chosen to engage the critics and give in to an extent, to their demands. Accordingly, Land Use Charge payable for properties which are devoted to commercial activities has been reduced by half. This is very significant and should considerably reduce the antagonism from real estate professionals. What this translates to for instance is that for a property valued at N20 million, which is used for commercial activity, instead of about N92,000 or so originally payable, such property would now only need to pay about N46,000 annually.

    Another sore point was that the demand notices left a very short window for property owners to make payment. Those who were able to make payment during this short window would enjoy an additional discount of 15 per cent. But not much longer thereafter, penalties of up to 200 per cent would apply. Some Lagosians felt this was unfair especially as the majority only earn salaries monthly. There should at least be an opportunity for staggered payments, many canvassed. The new concessions granted by Ambode indicate that indeed, property owners will now be able to pay their Land Use Charge in installments if they so desire. Of course, this concession also means that the penalties for late payments have now been waived.

    Another category of property is those that are dedicated to manufacturing or industrial activity. Such properties now have their land use charge further reduced by 25 per cent. While those in which the owner-occupier also has part of his property deployed to commercial activity will also enjoy a similar discount of 25 per cent.

    The owner-occupier category is not left out and enjoys a further 15 per cent discount on his land use charge payment, according to the revised land use charge law proposals. It is hoped however, that these revisions will take effect after they have been properly analysed and agreed to by the law makers who passed the law in the first place.

    It is a mark of civilized governance and kudos to our growing democracy that Ambode has chosen to listen to the people over whom he presides and accede to their request. As some discerning commentators have observed, he showed considerable moral courage to implement a tax increase barely a year to the next gubernatorial elections.

    That act demonstrates that his motivation may indeed have been more about helping to actualise his vision for Lagos, a vision which he passionately advocated while addressing the business community last week. It takes a statesman to subordinate his personal ambitions in preference for the common good, in the manner he did.

    It is hoped that the various opposition groups including the Nigerian Employers Consultative Assembly, the real estate practitioners and others will positively appraise this move by the Lagos Government, sheathe their swords and help create the right environment for the state to move forward with implementation of these taxes.

  • Land Use Charge: NBA rejects LASG’s 50% reduction

    The Nigerian Bar Association ( NBA ), Ikeja Branch, has rejected the 50 per cent reduction of the Land Use Charge recently reviewed by the Lagos State Government.

    The Chairman, Mr Adeshina Ogunlana, told our reporter on Thursday said that the reduction by the Gov. Akinwunmi Ambode led-administration is “unacceptable”.

    “I am yet to hear officially from the  government about that reduction or see a document about it,  I have only seen news flash which I will treat only as a rumour.

    “The rumoured reduction is not acceptable, I don’t trust this government; this is democracy and if there is going to be a reduction you have to consult with the people.

    “The reduction is arbitrary and lacks legal basis. Due process must be followed, the law must be repealed and amended.

    “You cannot repeal a law by proclamation, we are not in the military era where laws are made by decrees and proclamation,” he said.

    On the association’s next line of action, Ogunlana said: “The NBA Ikeja branch will hold a press briefing to address this issue.”

    NAN reports that the LASG had increased the Land Use Charge by 400 per cent,  motor rate taxes by 1, 600 per cent, court Fees by 2,000 per cent and bore hole taxes by 68,000 per cent.

    Following the raise, the NBA Ikeja Branch had on March 13 in a solidarity with various human rights groups staged a peaceful protest from its Secretariat at Ikeja to the seat of power — the Lagos State Secretariat, Alausa.

    The protesters had at the State Secretariat presented a letter from the NBA to Gov. Ambode, who was represented by Mr Kehinde Bamigbetan, the State Commissioner for Information and Strategy.

    The letter dated March 12 was entitled, “Call For A Re-think and Review of The Land Use Charge Tax, All Other Excessive Taxes, Levies and Charges in Lagos State”.

    In reaction to the protest of the lawyers and activists, the Lagos State Government on Thursday announced a 50 percent reduction of the Land Use Charge.

    The reduction was part of the conclusions reached at the weekly meeting of the State Executive Council chaired by Ambode.

    NAN

  • Land Use Charge: Lawyers march in Lagos

    LAWYERS yesterday led a protest against the Lagos State Land Use Charge (LUC) Act, describing it as anti-people.

    They led the protesters to the House of Assembly at Alausa, Ikeja, a stone throw from the Governor’s Office, where they complained about the law to the lawmakers.

    Chairman of the Nigerian Bar Association (NBA) Lagos branch Adeshina Ogunlana  told reprters that the palcard-bearing protesters did not see anything good in the law.

    Some of the inscriptions on their placards read: “Stop killing justice in Lagos,” “No to hike in Land Use Charge,” “The country is hard enough don’t add to it,” “Developing Lagos to megacity and killing Lagosians with pharaoric taxes,” “No to taxes without consultation,” “Lagosians commit suicide daily, stop this hardship”.

    Ogunlana said the public was   shocked by what he described as the ‘’outrageous’’ law.

    He said : ‘’Our purpose is to communicate our grievances to Lagos State Government vis-à-vis the new direction by the governor. We have a letter for the governor. We have anticipated that the Lagos Assembly will be more accessible than the office of the governor,” he said.

    Ogunlana called for  review of the LUC,  adding that the law was passed without wide consultations.

    He faulted the enactment of the law by the state government, saying :  “the legislation usurps the power of local governments.”

    Addressing the protesters, Majority Leader  Sanai Agunbiade praised the protesters for being civil and peaceful.

    “It is your right to protest because peaceful protest is legitimate all over the world. The Clerk of the House, Mr. Azeez Sanni would receive the protest letter and give it to the Speaker, while the Commissioner for Information and Strategy, Mr. Kehinde Bamgbetan, would receive that of Governor Akinwunmi Ambode.

    “I want a good relationship with the NBA and the legislature. We will want you to attend our public hearings where we debate all our bills before they are passed into laws,” he said.

    Agunbiade said the Assemby was  passing people-oriented laws.

    “The governor is a listening person and what affects one person affects another so the right thing would soon be done by the governor. We represent the people and the governor is also there to serve the people,” he said.

  • Land Use Charge: Dialogue will lead to positive outcome, says Ambode

    Lagos State Governor Akinwunmi Ambode has expressed optimism that the current dialogue with various stakeholders on the new Land Use Charge Law would bring about a positive outcome in the overall interest of the people going forward.

    He said the State Government would come out with a positive position to ameliorate the issues raised by stakeholders on the new Land Use Charge Law in the next one week, saying the increment was all in a bid to protect the future and create permanent prosperity for the State.

    Ambode, who addressed reporters after leading a symbolic walk against sexual and domestic violence in Alausa, Ikeja, the state capital, said his administration was sensitive and responsive to the yearnings of the people.

    The governor said he had met with various stakeholders in the last one week to explain the rationale behind the new law.

    He said: “Just the way you would have observed, we held a session with the business community last week on Lagos Means Business and one of the topical issues that were raised was about the Land Use Charge. During that session, I did say that the state government was open to dialogue. Ever since that Tuesday, we have been consulting people and we have also been trying to explain the basis of this Land Use Charge law.”

    Ambode said out of the 300 tax items in the state, only the Land Use Charge and one other law were reviewed upwards.

    The governor said the development was targeted at fast-tracking development and protecting the future of the state.

    Also, a rights group, the EIE Project Ltd/GTE, yesterday sued the state government over the Land Use Charge (LUC).

    It is praying the High Court in Ikeja to declare that the state’s House of Assembly lacks powers to make the law, as it is.

    It prayed for a reversal of portions of the law for contradicting the 1999 Constitution.

    The plaintiff is seeking an interpretation of Section 7 (5) Item 1(J) of the Fourth Schedule of the 1999 Constitution (as amended).

    It is praying the court to strike out sections 3, 5 and 6 of the law for being inconsistent with 1999 Constitution.

    According to the plaintiff’s lawyer, Olumide Babalola, sections 3, 5 and 6 of the LUC Law 2018 are in conflict with the provisions of Section 7(5) and Item 1(J) of the Fourth Schedule of the 1999 Constitution.

    It prays the court to declare those portions of the LUC Law 2018 null and void, and restrain the Lagos State government from enforcing them.

    In a supporting affidavit deposed to by Seun Akinyemi, the plaintiff said being the occupier of 8, Alhaji Murtala Street, Aturanse Estate, Gbagada, Lagos, it was subject to the LUC law.

    “Upon passing the law, all the respondents have made press releases of the contents of the law and their intentions to start enforcing same any time soon.

    “I believe that sections 3, 5, 6, 10 and 14 are inconsistent with the provisions of Section 7(5) and Item 1(j) of the Fourth Schedule of the Constitution of the Federal Republic of Nigeria, 1999 (as amended).

    “I believe that the applicant will be greatly prejudiced by the enforcement of the Land Use Charge Law,” the deponent said.

    Lagos State government, Attorney General and Commissioner for Justice and the House of Assembly are the respondents.

    According to the plaintiff, Lagos lawmakers lack the powers to make or pass the Land Use Charge 2018, which contains provisions of the constitutionally exclusive functions of the local governments to assess, levy and collect tenement rates.

    It is praying the court to strike out the provisions of sections 3, 5 and 6 of the Land Use Charge Law of 2018.

    The plaintiff said it filed the suit after it made several unsuccessful attempts to settle the matter out of court.

    EIE Project Ltd/GTE prays the court to determine whether or not the respondents can validly pass the LUC, which contains several provisions on assessment, levying and collection of tenement rates that are the exclusive functions of local governments.

    No date has been fixed for hearing as respondents are expected to be served with the suit, which was filed yesterday.

     

  • Lagos State land use charge: The true story

    Those kicking against the implementation of the revised LUC Act are living with the fear of the harmless, experts have said. To them, the outrage over the law reviewed by the administration of Governor Akinwunmi Ambode to bridge infrastructural deficit in Lagos State, is uncalled for, reports BUNMI OGUNMODEDE.

    What the LUC Law 2018 is all about

    In simple term, the law repeals an earlier one of 2001, therefore, it is not new.
    It also consolidated ground rent, tenement rate and neighbourhood improvement levy, therefore, Lagosians would not be victims of multiple taxations under the new law.
    The law went through the required legislative processes before it was passed which included a public hearing where those now crying could have ventilated their apprehensions; this process brought a number of reliefs that were embedded in the law.

    Who pays what?

    • If you are a landlord and you are the only one living in your house with your family (no tenant). Your annual fee is 60 per cent of the value of the house × 0.076. For instance, if your house is valued at N20 million. Your fee is 0.076 per cent of (60 per cent of N20 million) is 0.076 per cent x N12 million which is N9, 120.00 per annum.
    • If you rented out the house to tenants only and you don’t live there and the house is worth N20 million. You will pay 0.76 per cent of (60 per cent of N20 million) is 0.76 per cent of N12 million is N91, 200.00
    • If you are a landlord living with your tenant in the same building of the above value. You will pay 0.256 per cent of (60 per cent of N20 million) is 0.256 per cent × N12 million is N30,720.00

    IF the computations of the revised Lagos State Land Use Charge (LUC) Act 2018 are anything to go by, the controversy trailing it may not be unwarranted. The law, which was enacted in 2001, with a provision for review every five years, was not reviewed until 2017, 15 years after its introduction.

    According to the government, the upward review of the LUC Law was to increase the state’s internally generated revenue and expand its tax base. But the ambitious intention was the government drew flaks from a section of the society.

    Critics of the revised law, especially property owners, want the government to roll back the review over fears that its implementation would adversely affect their businesses.

    But, the government said there was no cause for alarm as the augmentation on owner-occupier property was marginal.  It explained that the review was done in line with the prevailing economic realities and in the overriding interests of the future of Lagos as a mega city.

    At a parley with business executives last week, Governor Akinwunmi Ambode, explained to property owners what informed the review, adding that his doors were opened to dialogue.

    Not a few stakeholders blame the misgiving of some residents on the dearth of communication and education of tax payers before the government unveiled its plan to commence the implementation of the revised law.

    One of the captains of industry at the governor’s parley with business executives, Alhaji Aliko Dangote, the Group President of Dangote Group, said the business environment in the Centre of Excellence was friendlier than what obtained in others states.

    Speaking at the forum tagged: “Lagos means business”, Dangote described Ambode’s explanation as a demonstration of his passion to take the state to loftier heights.

    He said the economic drive by the government was one that required the support of all and sundry by performing their civic responsibility of paying their taxes as and at when due.

    Dangote said: “I am more convinced now and I think people should really be voluntarily paying taxes in Lagos. I think for the people who are doing business here, Lagos is the most-friendly states in Nigeria. If you really want to know, try other states and you will see…

    “I am not advertising for Lagos but there is not a single time you go with a problem and the governor will ask you to go and come back tomorrow because in most cases, he will call everybody and say let us sit down and sort out the issues. So, your Excellency, we congratulate you and assure that we will continue to support you.”

    A tax expert, Taiwo Oyedele, appealed to the government to improve its communication and engagement with stakeholders on the revised LUC Law. He spoke of the need for the government to do more explanation on how it worked and computed the new rates to prevent misinterpretation and controversy.

    Oyedele, the Head of Tax & Regulatory Services, PricewaterhouseCoopers (PwC) Nigeria, spoke with the News Agency of Nigeria (NAN) in Lagos at the weekend.

    He said: “Government needs to communicate better and engage people more. May be the implementation from when the law was announced was too quick and people did not have enough time to digest it.

    “It is important for government to clarify and simplify the computation so that an average property owner can compute it without any external assistance.

    “There are lots of miscalculations and misinformation on the social media because people do not understand how to calculate it.

    “On a N100 million worth of an owner-occupied property, you would pay less than N50, 000 per annum.

    “If the N100 million property was for commercial purpose, that is you are renting it out, you would pay about N200, 000.

    “Effective communication for development is necessary to amplify voice, facilitate meaningful participation and foster social change,” the tax expert said.

    Also yesterday, the Centre for Public Accountability (CPA) threw its weight behind the government, saying the outrage over the new law was uncalled for.

    In a statement by its Executive Director Olufemi Lawson, the CPA said the Ikeja Branch of the Nigerian Bar Association (NBA) erred by issuing the Ambode-led administration  a seven-day ultimatum to reverse itself on the LUC Act.

    It said the professional body threw etiquettes into the wind by offering itself as mouthpiece for those it classified as “tax evaders”.

    The statement reads: We, at the Centre for Public Accountability (CPA) as well as our civil allies across the nooks and crannies of Lagos State are concerned at the implications of recent outcry and what we observe, as the crocodile tears being shed by a seemingly privileged, social segment of the Lagos State populace on the implementation of Land Use Charges Law, 2018.

    “The most comical of these groups, is the Nigerian Bar Association (NBA), Ikeja Branch, that has thrown professional etiquettes to the winds, abandon its well-cherished traditions as the defender of the less privileged and socially alienated to become the mercenary megaphone of some over pampered, higher middle class perpetual public tax evaders.”

    The CPA described as condemnable the purported threat by the Ikeja branch of the NBA to call its members out on the streets should the government refuse to roll back the law by this week.

    It said:  “Our take up point in this brief intervention would be to condemn in unmistaken terms, reports in the news media, particularly that of The PUNCH newspaper of Thursday, 8th, 2018 where a purported seven-days ultimatum was issued to the Lagos State Government by one, Mr. Adeshina Ogunlana, the Chairman, NBA, Ikeja branch to reverse the Land Use Charge Law, 2018. An act that was never a product of arbitrary proclamation of the state governor!

    “It is a great wonder that learned men of the legal profession cannot simply take the civilised means of rectifying of perceived social injustice by approaching the competent court of law to seek judicial pronouncement on the law, but rather gentlemen of the legal profession are threatening fire and brimstone to take laws into their own hands by disrupting law and other in the state.

    “We unequivocally condemn the plan of Ikeja NBA to cause public riot in the state if the law is not reversed. Need we remind the NBA, Ikeja Branch, that other well-meaning Lagos civil society organisations like ours are at liberty to rally round our members to equally protest the attempt of the Bar to instigate chaos in the state.

    “We recall that the NBA, under the late Alao Aka-Bahorun and Olisa Agbakoba played progressive roles while lawyers like the late Kanmi Ishola-Osobu and Chief Gani Fawehinmi always tilt towards the majority poor and not a minority, few privileged cabals.”

    “It is trite in law to re-emphasise that equity does not aid the indolent who sleep on their rights. It also put in place a defined, scientific and progressive tax system that weighs heavily on the upper class of the society who do not always want to pay tax. Since over 15 years that the law was first enacted, despite astronomical inflationary index, the minimum charge in 2001 was N1,200 (One Thousand and Two Hundred Naira) and in 2018, it is N5,000 ( Five Thousand Naira), it is only the super-rich with exotic properties in choice locations like Lekki Peninsula, Ajah, Victoria Garden City, most of whom are rentier owners with suspicious means of income yet that are paying more because of the progressive nature of the charges.

    “The proceeds accruing from these charges are statutorily bound to be shared between the Lagos State Government and the 57 Local Government Areas and Local Council Development Areas to finance the infrastructural deficit of the fast-growing mega city.

    “The law set out self-assessment criteria for property owners and established a Land Use Charges Assessment and Appeal Tribunal (LUCAAT). The charge rate’ self-evaluation process is as simple as contextualised below:

    “Clearly, this fact speaks for itself that the aim of the law is to ensure that properties are properly and progressively valued with a lesser burden on the less-privileged. It should be added that the value of properties also varies from one location to the other.

    LUC Act with a human face

     

    • A general 40 per cent relief for all property liable to LUC payment, a 10 per cent relief for owners and occupiers with persons with disabilities.
    • A 10 per cent relief for owners and occupiers of 70 years and above.
    • A 10 per cent relief for properties above 25 years, a five per cent relief for properties occupied by their owners for over 12 years,
    • A 20 per cent relief for non-revenue generating federal and state government property
    • 20 per cent partial relief for non-profit making organisations.
    • Pensioners, churches, mosques, palaces, public places are exempted.

     

    Why the fuss

    To the CPA, the super-rich and the elite have been crying Wolf where there was none.

    It said: “CPA notes that it has become a norm in our country that most privileged individuals in our country only want to benefit maximally from the society without giving anything back as a birthright.

    “Most elected politicians usually run to procure tax certificates when they are vying for elections which means they don’t pay taxes unless when it becomes highly imperatives.

    “In the same manner, even private companies deduct taxes from and other statutory deductions like pensions, health and housing schemes from employees but don’t remit same.

    “The public sector is even worse, they make the deductions and loot them into private accounts, the cases of the alleged scandals in the pension funds and the National Health Insurance Scheme (NIHS) are still very fresh in our minds.

    “It is in the character of Nigerian upper-middle class to illegally corner wealth and store same in tax haven as has been revealed with the Panama Papers and other mind-boggling revelations of Nigerians try to evade paying appropriate taxes.

    “The Minister of Finance, Mrs. Kemi Adeosun, is presently leading a Federal Government campaign on Voluntary Assets and Income Declaration Schemes (VAIDS) to encourage notorious tax evaders to pay within a clemency period or face stiff penalties and prosecution.

    “Every rational person knows that tax is a fundamental means for government to raise resources to meet up with the provision of social amenities that make life more amenable to the citizens.

    “The LUC Law is only unique to the extent that it aspires to progressively tax the more privileged citizens to help in providing humane living environment for the less privileged. This is however not accidental, the government has over the years provided good ultra-modern environments for people living in areas like the Lekki Peninsula, Ajah, Ikoyi and Victoria Garden City, now the same government is asking people who have properties in these places to pay quality and commensurate land use charges so that other areas of the State like Ajangbadi, Ikorodu, Ajegunle can be upgraded.

    “We call on all Lagosians to join hands at ensuring that even when there is en-even development in various areas of the state, that there is also a combined development whereby, those areas that are more socio-economically advanced give a helping hand to bring up areas that are still crawling.

    “This is the main social kernel of this LUC Act; it is a tip of social redistribution of growth and social equity to all. The super-rich should stop crying wolf and pay up.”

  • Land Use Charge: Lagos govt faults ‘outrageous amount in circulation’

    Land Use Charge: Lagos govt faults ‘outrageous amount in circulation’

    •Govt extends discounted payment till April 14
    •NBA Ikeja to Ambode: reverse charge or face mass protest

    The Lagos State government yesterday clarified the figures circulating in the media on the rate for the newly reviewed Land Use Charge Law of 2018.

    It said many of the numbers were based on several years of arrears on the levy not paid by affected property owners.

    Addressing reporters at the Bagauda Kaltho Press Centre at Alausa in Ikeja, the state capital, Information and Strategy Commissioner Kehinde Bamigbetan said there were several misconceptions and a lot of misinformation about the new law.

    The commissioner noted that the law was a progressive enactment by the House of Assembly and handed over to the Executive for implementation in the overall interest of the people.

    He dismissed the humongous figures being bandied about on the social media, saying many of the calculations were based on arrears of many years of non-payment.

    Bamigbetan said: “The fact is that this law took a long process to be made. It started as a bill and went through the first reading, second reading, public hearing – to which all stakeholders were brought together to debate it – and some of the reliefs we have seen were part of the debate expressed by the stakeholders about the need to protect the vulnerable segment of the society.

    “Having made the law, the Lagos State House of Assembly has handed it over to the Executive to implement.

    “The second important part is that a lot of relieves have been built into the law, but many people are confusing arrears with the actual figure. If you see those figures, ask whether it is for one year or arrears of several years of non-payment. The humongous figures that are being bandied around, particularly in the social media, relate to the arrears of many years of non-payment which are computed together.”

    Also, the Commissioner for Finance, Mr Akinyemi Ashade said the government had extended the period for tax payers to enjoy the 15 per cent discount in the reviewed Land Use Charge Law till April 14.

    Ashade said this would enable the government to implement and enforce the new law, as well as allow many property owners to benefit from the discount.

    The commissioner, who reacted to the outcry of some sections of the public on the new law, said under the old law, which had not been reviewed since 2001, the Land Use Charge rate was inaccurate and retrogressive as it reportedly deprived the state of keeping track of all economic activities that relate to land across the state.

    He said the law, which was reviewed by the House of Assembly and signed into Law by Governor Akinwunmi Ambode on February 8, is a merger of all property and land-based rates and charges in the state.

    Ashade said: “There was an urgent need for the repeal, as the old law had not been reviewed for over 15 years – since 2001. Under the old law, the LUC rate was totally inaccurate and retrogressive. It deprived the state of keeping track of all economic activities that relate to land in Lagos State.

    “The new law is a consolidation of ground rent, tenement rate, and neighbourhood improvement levy. This charge is payable annually in respect of all real estate properties in the state, which means owners and occupiers holding a lease to a property for 10 years or more are now liable to pay the annual LUC invoice charged.

    “Thus, the Tenement Rates Law, the Land Based Rates Law, the Neighbourhood Improvement Charge and all other similar property rates or charges, laws or amendments to any such property laws shall cease to apply to any property in Lagos State as from 2018.

    “Nonetheless, all pending invoices, orders, rules, regulations, among others, under the 2001 repealed Law shall continue to be in effect until such obligations are discharged.”

    Explaining the calculation of the amount payable, the commissioner said property owners can determine the amount by multiplying the market value of their property by the applicable relief rate of 40 per cent and annual charge rate.

    He said: “Upon receiving a notice or not, the new law has made it possible for owners to calculate their charge and enable prompt payment, which allows them to benefit from a 15 per cent discount for early payment, applicable to payments made within 15 days of receipt of demand notice.”

    Responding to fears of tenants that the new law might force landlords to increase rent, Ashade said aside the fact that the Lagos State Tenancy Law 2011 was still in force.

    The commissioner said the incidence of payment for Land Use Charge under the new law is on the landlord and not the tenant.

    He added that the minimum rate was only increased from N1,200 in 2001 to N5,000, while there is provision for self-assessment and Assessment Appeal Tribunal under the new law.

    On vacant properties, Ashade said such would be treated on the basis of owner-occupier and not as a commercial property.

    He said the target of government is to make commercial property owners to pay a little bit more.

    Also, the Ikeja branch of the Nigeria Bar Association (NBA) yesterday urged Governor Akinwunmi Ambode to reverse the new land use charge to the former rate to avoid overburdening the residents with tax.

    The body of lawyers described the new tax regime as an “economic genocide”.

    The chairman of the branch, Mr. Adesina Ogunlana, who addressed reporters in Ikeja, the state capital, noted that except the new land charge is reversed, the branch would embark on a street protest, tagged: Walk the Talk, next Tuesday over what he called 400 per cent increment in land use charge and other taxes which attracted over 300 per cent increment.

    He listed other taxes that attracted increment to include car registration and filing cost of litigation in the Judiciary, which he said “has jumped astronomically, pushing genuine but financially weak litigants away from employing and enjoying access to legal and judicial justice”.

    Ogunlana said: “Clearly, the sharp increase in ancillary property tax of the Land Use Charge will have a bandwagon effect on all other services and function in Lagos State as owners of properties and services will automatically transfer other financial burdens to other cashmeres who will have to bear the burden or crumble under the weight.”

     

     

     

     

  • LCCI holds dialogue on Land Use Charge

    The Lagos Chamber of Commerce and Industry (LCCI) is set to hold a dialogue on the new Land Use Charge Law in Lagos.

    It is aimed at examining the provisions of the recently passed law viz-a viz its implications for residents and businesses operating in Lagos and its environs, the organisers said.

    The dialogue, according to LCCI, would hold tomorrow in Victoria Island, Lagos.

    Muda Yusuf, the LCCI Director-General, said: “In continuance of its Public Policy Advocacy Initiative, it behoves the LCCI to provide a platform, such as this, to aggregate the views of stakeholders (both public and private) on the new Land Use Charge Law in Lagos, which has generated heated debate in the public space.”

    Yusuf said: “This platform will enable stakeholders in the real estate, construction and other related sectorsto engage the Lagos State government on the recently- passed law and renegotiate its grey areas.’’

    The LCCI President, Mr. Babatunde Paul Ruwase, he said  was expected to chair the session.

    Yusuf said experts, leaders of businesses and top civil servants officials would attend the event.

     

  • Group backs new Lagos Land Use Charge

    A GROUP Coalition of Real Estate Investors and Surveyors (CREIS), has thrown its weight behind the new Land Use Charge unveiled by the Lagos State government, saying it is friendly to owners and occupers of properties.

    The law repealed the Land Use Charge Law 2001 (the LUCL 2001).

    CREIS convener Mr. Ayokunle Gregory said the increase was a mere 0.076 per cent and that the group arrived at the figure after an analysis.

    “We feel obliged to address the falsehood from a professional perspective before the unsuspecting public is misguided to bewilderment and violation of the law,” Gregory said.

    According to the group, the reviewed LUCL 2018 has put in place a standardised system.

    Gregory said the law  covers ground rent, tenement rate and neighbourhood improvement levy.

    The tenement rates law,  the land-based rates law, the neighbourhood improvement charge and other similar property rates or charges, laws or amendments to any property laws have ceased to apply to any property in the state from last month.

    However, pending invoices, orders, rules and regulations, among others, under the 2001 repealed law shall continue to be in effect until such obligations are discharged, he said.

    Gregory continued: “For owner-occupied residential property, the LUC per annum is charged at 0.076 per cent. For instance, if the market value of an owner-occupied property is N15 million, then the amount payable is N6, 840 per annum only, which amounts to N570 per month. For a property occupied by tenants, used for commercial purposes, at the same market value of N15 million, the LUC rate of that property will be N68, 400 per annum.”

    CREIS also said the state government had made available some reliefs for property owners and some specific owners according to their status. These include a 40 per cent relief for property liable to LUC payment; 10 per cent relief for owners and occupiers for persons with disabilities; a 10 percent relief for owners and occupiers of 70 years and above; 10 percent relief for properties above 25 years; five per cent relief for properties occupied by the owner for over 12 years; 20 per cent relief for non-revenue generating federal and state government property, and 20 per cent partial relief for non-profit making organisations.

    Also, some properties are exempted from the LUC payment, such as those used for public and religious activities; educational institutes and charity; pensioners above 60 and above; public cemeteries and burial ground and all palaces of recognised obas and chiefs in the state.

    “To clear any misinformation, we implore all owners and occupiers of properties in Lagos to do a self-assessment using the formula provided, and also provide officials with valid documents to ensure a smooth run of the exercise for the benefits of all,” the group added.

    The charge is paid yearly by owners and occupiers holding a 10-year lease. Using the formula provided by the law, they can calculate their rate by multiplying the Market Value (MV) of a property by the Applicable Relief Rate (RR) and Annual Charge Rate (CR).