Sanctions to defaulters under the reviewed land use charge (LUC) of Lagos are too severe and not in tandem with democratic ideals.
Babatunde Ruwase, president of Lagos Chamber of Commerce and Industry (LCCI), made the observation during a stakeholders’ forum on Friday.
He said while the chamber would not encourage or support any form of infractions of the law, the sanctions must be proportional and fair.
Land use charge law stipulates a 25 percent increase in charge if payment was not made between 45 and 75 days.
It also prescribed a 50 percent increase after 105 days and a 100 percent increase if payment cannot be made between 75 to 105 days.
The law prescribed that a property shall be liable to enforcement if payment is not made after 135 days of notice.
“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,” Ruwase said.
“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.”
He said 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 the 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 was followed and conditions stipulated for law review occurred before implementation of the law.
He said 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, said the law aimed at entrenching a regime of self-assessment, would allow property owners to make their own calculation and know their rate with the help of professional valuers.
According to him, property of N10 million and below constitute 75 percent 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.