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Pressure mounts on Lagos to reverse new land use charges

Pressure appears to be mounting on the Lagos State Government over its newly introduced Land Use Charge Law, in respect of which charges therein are said to be on the high side and are being contested by certain quarters.

Akinwunmi Ambode
Governor Akinwunmi Ambode of Lagos State

State governor, Akinwunmi Ambode, has been defending the charges, saying however that government is ready to dialogue on the matter.

On Tuesday, March 6, 2018, the Manufacturers Association of Nigeria (MAN) appealed to the Lagos government to reverse its current increment of land use charges to ensure the survival of the manufacturing sector.

Dr Frank Jacobs, MAN President, made the plea in an interview with the News Agency of Nigeria (NAN) in Lagos.

Jacobs said that the sudden rise in the land use charges in the state could lead to the collapse of the already burdened manufacturing sector.

The Lagos State Government had recently repealed its 2001 Land Use Charge Law and replaced it with a new Land Use Charge Law, 2018 to increase its internally generated revenue and continue to expand its tax base.

The state government had explained that the recent increase in the land use charge would provide more resources to the state to provide social services and infrastructure to the benefit of the general public.

It also extended the period for the payment of all annual Land Use Charge (LUC) Demand Notices for 2018, to Saturday, April 14, 2018.

This, it said, is to enable property owners and affected occupiers to take the option of enjoying the discounts available for the prompt and early payment of LUC invoices.

However, controversy had trailed the review of the land use charge as the Organised Private Sector (OPS) rejected the newly passed LUC Law, vowing to fight the law with every legal means at its disposal.

Jacobs said that the state government ought to have consulted widely before considering the implementation of the new charges law.

“The stakeholders in the manufacturing sector were not carried along adequately before the execution of the policy as the sector is already contending with a lot of challenges.

“One of the challenges of this policy is that, if allowed to stand, other states in the country will soon begin their own increment of the land use charges,’’ he said.

The MAN president said that the increase, if not reversed, would also make the cost of finished commodity to be too exorbitant for Lagosians to afford.

“The new charges can make our locally produced commodities to be too expensive compare to imported products.

“The new charge negates the Federal Government’s initiatives for the spread of locally manufacturing companies in the country,’’ he said.

But Governor Ambode has offered reasons for the reviewed charges, saying that Lagosians need to make sacrifices in the light of the level and cost of infrastructure being provided by government.

His words: “So, somebody comes and say we have increased by 400%. The question is the 400% of what? You were paying N10,000 before, now we say you should pay N50,000 and you are calculating and turning statistics upside down by saying it is 400%.”

He explained that while the revised Land Use Charge Law requires owner-occupiers to pay “just” 0.076 per cent, pensioners, churches, mosques, non-governmental organisations and government institutions are exempted from payment.

Ambode added: “The law was made in 2001. It provides that, every five years, we should review it and also find a way to increase. Fifteen years after in 2017, the law has never been reviewed. Now, the question is this: those who are having commercial properties, the rental income they were getting in 2002 as against the rental income they are getting in 2017, is it the same? The level of infrastructure that existed in 2002 as against what has happened in the last 15 years, are they the same? Did it not come at a cost?

“So, why is the market value of the property that you built with N1 million, 15 years after, you are selling at N20 million? Why do you think somebody who is a buyer will pay N20 million for it? Is it not because of the facilities around the property? So, we have to sacrifice; that is how it works everywhere.”

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