Fashola cuts rates on land transactions to woo investors

In a move aimed at wooing investors towards further strengthening the economy of Lagos at a time falling oil prices are pushing some states towards insolvency, Governor Babatunde Fashola has signed an executive order slashing rates applicable to land transactions in the state.

The governor’s action is a response to public outcry against difficulties associated with land transactions in Lagos, Nigeria’s economic hub. The state government believes the slash will ensure that land transactions are carried out with minimal difficulty especially as it relates to payment of taxes, rates and levies charged under the enabling law.

But the state government will need to take a step further to ensure the workability of the new order by carrying out some reforms in the Lagos Land Bureau.

According to BusinessDay, staff of the bureau could stand in the way of the successful implementation of the order. It is common practice to ‘settle’ for any land transactions to run its course otherwise frustration stands in the way of the applicant.

The executive order (No. EO/BRF/001 of 2015) signed by Fashola on Monday, provides among others that, “unless otherwise indicated, the valuation of landed property for the determination of tax and other charges payable shall be by reference to the statement of fair market value produced by relevant professionals, adopted by the state government and published from time to time in the official government gazette”.

The order, which takes immediate effect, reduces consent fees from 6 percent to 1.5 percent while capital gains tax, which was previously 2 percent, is reduced to 0.5 percent. Also cost of stamp duty has been reduced from 2 percent to 0.5 percent while registration fee is reduced to 0.5 percent from 3 percent.

According to Fashola, the order is intended to improve the internal management of the state government and not to create any rights or benefits, substantive or perpetual, enforceable at law or in equity by a party against Lagos State, its departments, agencies or entities, its officials, employees or experts or any other person.

The governor said at the time when the state’s economy was challenged, there was need to continue to grow the information on capital, business concerns and industrialisation, adding that some of the expectations in expanding business in the state’s enterprise zones and the free trade zones could only be achieved through the reduction of cost of land acquisition.

“We expect also that if we as government play a role, by reducing the cost of setting up business, we have made a huge impact enabling private enterprise to thrive and in that way hopefully provide employment opportunities to businesses that will be formed as the results of this policy intervention”, the governor said.

This item originally apeared on BusinessDay news