Lagos Chamber of Commerce and Industry (LCCI) has stated that sanctions to defaulters under the Reviewed Land Use Charge (LUC) Law by the Ambode government are too severe and not in tandem with democratic ideals.
Mr Babatunde Ruwase, the President of LCCI, made the observation in Lagos on Friday during a stakeholders’ forum on Lagos Land Use Charge Law, 2018.
He stated that while the chamber would not encourage or support any form of infractions of the law, the sanctions must be proportional and fair.
“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 recession. Many companies are yet to return to profitability.
“Industrial capacity utilisation has declined, purchasing power is still very weak, occupancy rate in many commercial and residential properties are still very low.
“All of these have adversely impacted the returns on investment in property market and points to the fact that current market value of property may not necessarily reflect the rental income for the property,” Ruwase said.
Ruwase observed that only 300, 000 property were paying the charge, while 700, 000 property were identified for tax payment.
According to him, emphasis should be on getting more property into the tax net, rather than imposing additional burden on those currently on the database.
He urged government to explore the platform presented by VAIDS to capture more property owners into the net.
Ruwase suggested that implementation of the law be suspended, while the grey areas should be sorted out in the interest of fairness, equity and natural justice.
According to him, there is no evidence to show that adequate dissemination of information to critical stakeholders were followed and conditions stipulated for law review occurred before implementation of the law.
He said that stakeholders were concerned that assessed value used for computation of the law was high and difficult to justify.
According to him, the business community appreciates government’s efforts in investing in infrastructure and security and businesses are willing and ready to pay their tax.
He appealed to the government to create a tax environment that would be fair, equitable, inclusive, transparent and investment friendly.
Akinyemi Ashade, Lagos State Commissioner for Finance, had explained that the law was aimed at entrenching a regime of self assessment that would allow property owners to make their own calculation and know their rate with the help of professional valuers.
Ashade said that various reliefs had been made available to payers, including a general 40 per cent relief for all property liable to LUC payment.
According to him, property of N10 million and below constitute 75 per cent of property owners in the state and are expected to pay N5000 per annum as land use charge.
Ashade said that the new Law also established an Assessment Appeal Tribunal which authorised the adoption of Alternative Dispute Resolution in resolving disputes concerning LUC demand notice provided the appeal was lodged within 30 days after the receipt of the notice.