The Sun News

OPS rejects increase in Land Use Charge

 Charles Nwaoguji

The Organised Private Sector (OPS) comprising members of the Manufacturers Association of Nigeria (MAN), Nigeria Employers’ Consultative Association (NECA), Nigerian Association of Chambers of Commerce, Industry, Mines and Agriculture (NACCIMA), National Association of Small and Medium Scale Enterprises (NASME) and National Association of Small Scale Industries (NASSI) has rejected the 400 per cent increase in Land Use Charge (LUC) by the Lagos State government.

Labour said the process of reviewing the law did not meet the normal practice in legislative procedure, adding that from the outcome of the public hearing, the public was against the reviews.

“It is shocking that lawmakers failed to take into account the outcry of the citizens against the planned increase. The whole process of the public hearing is for the legislators and the executive to gauge the feelings and disposition of the public and residents to the review,” they said.

Spokesperson for the OPS, Mr. Timothy Olawale, at a forum organised by the Lagos Chamber of Commerce and Industry (LCCI) explained that in the old law, there was provision for the government to review the Land Use Act every five years.

“Nobody ever contested the right of government to carry out a review, but it has chosen over the years not to review the applicable laws. That should not be visited on Lagosians through astronomical review of the LUC.

“We, therefore, do not agree with government’s enormous review based on the increase of the applicable rate from 0.394 to 0.761 per cent. The second is the assessed value of the property, which has also been upwardly reviewed over 400 per cent.”

Speaking in the same view, the President of LCCI, Mr. Babatunde Ruwase, said that the Nigerian economy is only just gradually recovering from recession with many companies yet to return to profitability.

He noted that industrial capacity utilisation has declined, while purchasing power is still very weak and occupancy rate in many commercial and residential properties are still very low.

Ruwase stated that all of these have adversely impacted the returns on investment in property market, adding that this points to the fact that current market value of property may not necessarily reflect the rental income for the property.

“Many real estate investors have made considerable investment to develop the value of their estates. Huge resources were committed to sand-filling and reclamation, roads, drainage, sewage, borehole and electricity. The LUC does not take account of these investments by property owners,” he said.

He stated that the implementation of the new LUC should be put on hold until some key provisions in the law are  addressed in the interest of fairness, equity and justice.

Responding, the Commissioner of Finance, Lagos State, Mr. Akinyemi Ashade, said that only 300,000 properties are paying the LUC.

He stated that although the number of properties identified for tax is in excess of 700,000 but the payment is low. The property owners are not paying, which makes it difficult for the government to execute any project in the state.

“For the sake of transparency and best practices, we will look into every suggestion made here today and treat it to the best interest of all,” he added.



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March 2018
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