The Lagos State Governor, Mr. Akinwunmi Ambode, on Tuesday said his administration was careful about the negative responses around the revised Land Use Charge Law and stated the government is ready to have a discussion.
Ambode announced at the ‘Lagos Means Business’ forum with the Organised Private Sector put together by the state Ministry of Commerce, Industry and Cooperatives.
The governor, who was inundated with questions on the appropriateness of the law, especially the increased charges, said the review of the law was not a purposeful attempt by the government to give out problems to owners of properties but a decision taken in the best interest of the future of Lagos.
According to him, the law is not new but was passed in 2002 with a provision for review every five years, adding that until now, the law had not been reviewed though all the economic indices had changed considerably in the 15-year interval.
Ambode stated, “The law was made in 2001. It provides that every five years, we should review the charges and also find a way to increase. The law was never reviewed 15 years after until in 2017. Now, the question is this; those who are having commercial properties, the rental income they were getting in 2002 as against the rental income they were getting in 2017, is it the same?
“The level of infrastructure that existed in 2002 as against what has happened in the last 15 years, are they the same? Did it not come at a cost? So, why is the market value of the property that you built with N1m 15 years after, you are selling at N20m. Why do you think somebody who is a buyer will pay N20m for it? Is it not because of the facilities around the property? So, we have to sacrifice; that is how it works everywhere.
“So, somebody comes and say we have increased (the charges) by 400 per cent. The question is 400 per cent of what? You were paying N10,000 before, now we say you should pay N50,000 and you are calculating and turning statistics upside down by saying it is 400 per cent.”
The governor said that while the revised Land Use Charge Law required owner-occupiers to pay 0.076 per cent of the value of their properties, pensioners, religious institution, non-governmental organisations and government institutions were exempted from payment.
Ambode added, “So, who will take care of the ones that are free? If you are owner-occupier, you don’t need to pay. So, it’s the commercial part that people are complaining about.
“Why have we increased the rate? We should have been doing this every five years but I am looking at it that if I must sustain the level of my vision, I have to give something back to people. I don’t have to come and meet you if I continue to borrow money, but we are borrowing to punish you ultimately, which is not what we want because it is even the taxes you pay that will pay the interest and the principal. Somebody needs to tell us the bitter truth for us to sacrifice together and that is what we have done.”
Reeling out statistics to explain the challenges that would confront the state in the nearest future, the governor said Lagos was projected to become the third largest consumer market in the world with a population of 35.8 million, closely behind Tokyo and Delhi, while the population growth and rapid urbanisation would put infrastructure and public services under pressure.
According to him, the state requires a minimum of $50bn over the next five years to bridge the gap of infrastructural deficit, adding that a special infrastructure fund that would be driven by the private sector to address social challenges was the way to go.