The re-enacted Lagos State Land Use Charge continues to draw criticisms despite a reduction of the rates by the state government. Commissioner of Finance/Economic Planning and Budget, Lagos state Mr. Ashade Akinyemi in this interview said the law is focused on property owners not tenants.
Read how he threw more light on the controversial law.
Why is the Lagos state government doing this at this particular time?
We are doing this because the governor of Lagos state realized quite sincerely that Lagosians deserve the best in terms of infrastructure renewal and building of new infrastructure.
We looked at infrastructure for the next five years and what we will need to continue to renew infrastructure and buildings, excluding housing, education, health will cost us close to $50 billion. So, if we have to spend all our budgets without paying salaries and just put everything in capital expenditure it will take us up to 18 to 19 years to be able to fix.
How did you arrive at the valuation of these properties because the outcry is that properties are overvalued to arrive at higher taxes?
The law is kind enough to provide for a regime of self-assessment. All you need to do is get a property lawyer or property valuer, let them value your property, the rate is available and reliefs are also available. We want to make it easy for people to calculate. If you know the value of your property, you know, it is not the 100 percent of that value that is accessed, it is 60 per cent. So, you will enjoy 40 per cent relief and you know the charge rate.
The ministry of finance wants to implement this with a human face, we have strengthened our help decks and we have our agents in the 3 senatorial district and local governments.
But let it be known that this law is for the basis of the progress of Lagos and it not punitive because we don’t want to punish our citizens.
We have instances that people have put out there, that the percentage increase is 40 percent. We will like to say that the percentage can be misleading because for example a property owner who has been paying the full amount of N1,200 under the old regime and maybe the property was demolished. You now build a mall or something else and you continue to say, it is the N1,200 that you paid last year, whereas in term of features and the scale of development done on your property is quite significant. You don’t expect that, it is going to be 100 percent increase or 200 percent, it is going to be percentage that reflects the development that had taken place on your property.
If your property is in Ikoyi and Ikorodu even if they were constructed the same way they will never be the same amount.
This is what this new law is trying to institute and we are for it and we believe that we need to be transparent in terms of doing business.
The land use charge is a consolidation of 3 taxes. The first one is the tenement rate, the second one is the land use charge and the third one is the neighborhood improvement charges.
You classified old people from 70 as elite qualified for reliefs, what happens to those who started early and retired before attaining 70?
Let me take you through the regime of reliefs that we have. The general reliefs that we have is 40 per cent across board and you don’t need to apply for it. Immediately you have the valuation of your property 40 per cent of it is off, it is only 60 per cent that is chargeable under the new regime of land use charge.
In addition, if you are a pensioner the reliefs move from 40 to 100 per cent, and this is defined under the law, what I mean is, if the relief is 100 per cent, you are not paying anything at all.
Pensioners under the law, are people that have retired, 60 years and above and not 70 years. You have to be in your own property. If you have about three or four across the state, the one you are staying, the one that you occupy is absolutely free but you are required to pay on the others.
Beside the 40 per cent that is general, if you have people with disability, they enjoy 10 per cent which means that it has moved from 40 to 50 per cent. Aged people that are 70 years and above also enjoy additional 10 per cent.
If you have your property at a place that is more than 25years you also enjoy additional 10 per cent. There is also a regime of 5 per cent additional reliefs for people that are categorized as long occupation.
These are the regime of reliefs that have been put out there.
The only thing the law has provided is that there is a general relief that is 40 percent but you have to apply for the other reliefs under this regime.
On a commercial property where the owner fails to pay, and then you have to take over that property, what happens to the tenant?
The law is not focusing on the tenants; the law is claiming that property owner should pay. It is their responsibility to pay that due charge. If it now gets to a situation where we have property owners that have not paid and we have to start enforcing we will do it with human face, government is meant to address people’s concern and make life easy. We want to ensure that we don’t enforce in a way that will make our citizens to be worried.
If the tenant has to come out and pay, because the owner could not pay, you can take it away from your rent, it is allowed. The truth of the matter is that, the law has made provision for that and there is also protection under the rent law of Lagos state government. The tenancy law is there to protect the tenant in this arrangement.
Credit: Daily Trust