By Kazeem Ugbodaga
Lagos State Governor, Akinwunmi Ambode on Tuesday said he is ready to dialogue with the Organised Private Sector, OPS on the Land Use Charge, LUC, controversy, with a bid to arriving at a compromise.
The governor spoke at a parley with the OPS, tagged: “Lagos Means Business” held at the Eko Hotels and Towers, Victoria Island, Lagos, Southwest Nigeria.
The review of the LUC has been generating controversy in Lagos, with the OPS saying it will resist the review which it put at 200 percent increase.
Addressing the audience made up of business moguls and captains of industries, Ambode said according to law, the LUC was supposed to be reviewed every five years, but lamented that the law had not been reviewed since 2002 when the law was set up, which spanned about 15 years.
“So, what is the Land Use Charge all about? So, in order for us not to invoke the anger of the poor, we tax those who are rich. The law was made in 2002. It provides that every five years, we should review it and also find a way to increase. 15 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 issue is this, 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 one 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. So, somebody comes and say we have increased by 400 per cent. The question is, the 400 per cent 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 per cent. Is it not still small?” Ambode asked?
The governor clarified that pensioners, churches, mosques, NGOs and government institutions did not need to pay the LUC.
“But do you know the truth? Pensioners don’t need to pay. Owner-occupiers is just 0.67 per cent. For churches, mosques, NGOs, government institutions is free. So, who is the one that will take care of those that are free? If you are owner-occupier, you don’t need to pay. So, it’s the commercial part that people are complaining about.
“Why have we increased? We should have been doing this every five years but I am looking at it, if I must sustain the level of my vision, I have to give something back to people. I don’t have to come and meet you if we are borrowing money. But we are ready for dialogue, that is the sacrifice,” he said.
Ambode disclosed that N13.2 billion was generated as LUC in 2017, adding that N284 billion was raked in as taxes also in 2017.
According Ambode, the bottom line of the matter was that in public service, political decisions that appeared senseless to people in the private sector were made in order to keep stability and make the society be together.
“In the last two and half years, you will agree that security has improved but all these come at a cost. We are 24 million; taxable adults in Lagos are eight million. The number of people that actually submitted tax returns in 2017 is two million and then only 700, 000 people paid their taxes,” he said.
The governor added that there was need for infrastructural funding to be driven by the private sector, stressing that “if Lagos State succeeds, Nigeria succeeds. We must drive capitalism with social and financial inclusion.”
Speaking, President, Dangote Group of Companies, Aliko Dangote said there was need for people to pay their taxes voluntarily, saying that Lagos is the most friendly place to do business in Nigeria.
He, however, supported the idea that the state government should reduce the LUC a bit so that people would start paying immediately.
Present at the event were the Chairman of Zenith Bank, Jim Ovia; Chairman of United Bank for Africa, UBA, Tony Elumelu; Akran of Badagry, Aholu Wheno Menu-Toyi 1; Oba Otudeko, Chairman of Honeywell Group, among others.
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