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Commissioner Explains Controversial Lagos Land Use Charge

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Amid the complaints about the new Lagos State Land Use Charge, the Commissioner for Finance, Akinyemi Ashade says an aggregated tax has combined three erstwhile separate taxes, namely; tenement rate, ground rent and neighbourhood improvement levy into one to form the land use charge.
Ashade, who noted yesterday in Lagos that Land Use Charge had been trending for the wrong reasons recently, said that instead of paying three different taxes, the tax payer pays just one consolidated tax.
“Land Use Charge is not new in Lagos, neither has it been arbitrarily introduced to the state. Rather, it emanated from a long process of deliberation, consultation and engagement, all of which typically precede law-making.
“Indeed, implementation of this particular tax was sequel to the passage of the Land Use Charge Law of 2001 as promulgated by the Lagos State House of Assembly.
“The law has therefore, been operational since 2001. Its stipulations are also fairly simple. It essentially applies to defined categories of properties which are in turn required to pay taxes that vary in accordance with the categories.
“In calculating the Land Use Charge payable on a property, a simple formula is applied: the estimated value of the property is multiplied by relief rate and further multiplied by the appropriate charge rate.
“While the estimated value of a property is self explanatory, I will explain each of the other two terms in more detail,’’ the commissioner said in a statement.
“The `charge rate’ is a relatively small percentage charge that is applied to different categories of property depending on their categorisation. A property that is occupied by the owner for instance, enjoys the lowest charge rate.
“A property that is used for industrial or manufacturing activity is categorised as `industrial’ and is charged higher than owner-occupied properties but considerably lower than `commercial’ properties.
“Commercial properties are those properties that are deemed to be fully utilised for commercial activity a bank branch for instance. There are a few categories in-between.
“There is also the `relief rate’ which refers to a discount on the calculated charge.’’
Ashade said the Land Use Charge Law of 2001 stipulated that reviews of the charges payable be made on a five-year basis but for some reason this did not happen.
Ashade recalled that with the Land Use Charge regime not undergoing any review for 16 years, as at 2017 before the repeal of the old law, rates payable had become significantly obsolete.
“So when some people complain that their rates have gone up by 300 percent over last year’s rates, the truth is that the rates have actually gone up for the first time since 2001.
“In adjusting the bill of a property owner from the N1,200 which he paid annually between 2002 and 2017 to N5,000 annually for instance, the new regime has simply tried to bring the charge up-to-date and in line with present day realities, regardless of the percentage increase.
“This is not to say, however, that the entire Land Use Charge administration is working perfectly. It isn’t.
“Like all systems which employ human intermediaries, there are occasional errors, especially where `Best of Judgement’ has been employed in determining the scope and size of a property and the exact use to which it is put.
“This typically happens where property enumerators are denied access to these properties. I would therefore like to implore Lagosians to kindly avail our enumerators of as much cooperation as possible when they visit your properties.
“This is to help ensure that ultimately accurate variables are used in determining the rates chargeable on each property,’’ he said.
The commissioner said that this is one of the reasons why Ambode made it clear at his engagement with the organised private sector recently, that the government was open to dialogue.
“The Land Use Charge bills are on paper demand notices, not etched in stone. Property owners who find their bills contestable are encouraged to contact the Land Use Charge Office Help Desk at Alausa or indeed any of our offices spread across Lagos.
“There are also provisions for mediation. If after all of this, a citizen remains unsatisfied, he may proceed to the Appeal Tribunal,’’ he said.
Ashade said that even though the law clearly stipulates that upon receiving a demand notice, payment must be made within 14 days, failure of which different penalties of up to 200 percent of the original bill would begin to apply, the reality is that the state government is making key concessions in this area.
“We appreciate that the economic situation has impacted everyone significantly and that the increases are steeper for some property owners than others.
“Property owners who are unable to pay the full charge up front can engage the Land Use Charge officials and jointly agree on a staggered payment plan. So the argument that government expects everyone to pay this charge in full upfront, regardless of your economic circumstances, is not correct.’’
He said the new Land Use Charge regime also has several reliefs or discounts that were designed to cushion the impact of the charge on property owners, noting that Pensioners who were aged 70 and above and who live in their own houses, were not expected to pay Land Use Charge.
“Every property enjoys a general 40 per cent discount on the calculated market value. Where a property owner goes ahead to pay his bill promptly upon receiving the demand notice, he enjoys an additional discount of 15 percent.
“A person living with disability and occupying his own property enjoys a further discount of 5 percent,’’ the commissioner said.
“So, I can confidently say that property owners need not be alarmed at what they may have heard or read regarding this new Land Use Charge regime.
“Land Use Charge does not seek to punish anyone. Where the charge is considered outrageous for instance, we have provided ample room for engagement with the Land Use Charge officials for possible review.
“And of course, we recognise that the law has been made for us and not vice versa.’’
Ashade said: “Very importantly, Land Use Charge is being implemented in an asymmetric manner. What this means is that it impacts considerably less on the less-wealthy or poor than the wealthy.
“In our ongoing enumeration of properties in Lagos for instance, we realise that the vast majority of properties across the state — close to 75 percent, are valued below 10 million.
“A building that is valued at under N10 million is required to pay annual land use charge of N5,000 (up from N1,200 which they were expected to pay in the old regime).
“Simply put therefore, majority of properties in Lagos will be required to pay N5,000 annual Land Use Charge which translates to N417 every month.
“A building that is valued at N20 million for instance, only pays N9,120 annually where it is occupied by its owner. If that building is being used commercially, it pays N91,200 annually.
“If on the other hand it is partly occupied by the owner and partly used for commercial activities, then the annual charge is N30,720,’’ he explained.
He reminded Lagosians of the horrifying conditions of physical and social infrastructure across the state, adding that from roads to drainages, from power to bridges, from education to healthcare, the story was the same.
Also, he noted that many of the residents were products of the public school system, but today on account of severe under-funding there was such a lack of confidence in the public school system that everyone who could afford it, takes his child to a private school.
“This need not be so. Is it decent to have Lagosians spend 7 to 8 hours in traffic everyday?
“But this is what we have been condemned to in the absence of a functional mass transit system and the inadequacies of our road and transportation infrastructure.
“Should we be relying on rickety commercial buses, otherwise called “Danfo’’, to convey human beings in the 21st century?
“It is against the backdrop of decades of under-investment in infrastructure in the face of our rapidly exploding population, that we came to the realisation that we must embark on aggressive infrastructure renewal across Lagos or brace up for total infrastructure collapse.
“Internally generated revenue is our best hope for redressing this humongous infrastructure deficit. Thankfully, the evidence of effort in this regard stares us in the face everyday.
“From completed and ongoing construction works at Badagry, Epe, Ikorodu, Ajah, Abule-Egba, Ojodu, Pen Cinema in Agege, Airport Road, Oshodi, Oworoshonki and others, to the sundry road infrastructure projects planned in this year’s budget, including the BRT lane from Oshodi to Abule Egba and the 8km alternative road to be constructed to link VGC with Freedom Road in Lekki Phase One.
“From the enhanced security across the state and the major streets which are all lit up at night to the planned investments in education, healthcare and others, clearly the Ambode administration is putting your taxes to good use.
“Our pledge is that even in the midst of our anxiety to work as frenetically as possible to deliver the infrastructure that Lagos requires, we will continue to engage Lagosians to ensure that the there is understanding, appreciation and buy-in by our people and that implementation of our IGR regime remains as humane as possible,’’ Ashade said.

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50-Year-Old Man Docked For N8.5m Land Fraud

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A 50-year-old man, Tunde Alabi, has appeared before a Yaba Chief Magistrates’ Court in Lagos over alleged N8.5 million land fraud.
Alabi of no fixed address, is facing a four-count charge of conspiracy, obtaining under false pretences, entry by violence and stealing.
He however, pleaded not guilty to the charge.
The prosecutor, SP Idowu Osungbure, told the court that the defendant committed the offences sometime in 2020, at Ibeju-Lekki area of Lagos.
Osungbure said the complainant, Mr Nnona Ejiofor, bought two plots of land valued at N8.5 million located at Ibeju-Lekki from the defendant who claimed it was a family land.
She said that the defendant issued a receipt of the sale to Ejiofor and he started constructing a building on the land.
The prosecutor stated that the defendant unlawfully entered the land and destroyed building materials worth N5 million belonging to the complainant.
Osungbure said that it was later discovered that the defendant was not the real owner of the land.
The offences contravened sections 411, 314 and 287 of the Criminal Laws of Lagos State, 2015 (revised) and Section 3 of the Properties Protection Law of Lagos State, 2016.
The Tide source reports that Section 314 is punishable by 15 years imprisonment for obtaining under false pretences, while 287 stipulates three years imprisonment for the offence of stealing.
The Tide source further reports that Section 3(4) of the Properties Protection Law of Lagos State, 2016 provides for 10 years imprisonment for the offence of entry by violence.
Chief Magistrate Olatunbosun Adeola admitted the defendant to bail in the sum of N500,000 with two sureties in like sum.
Adeola held that the sureties must submit copies of their National Identification Number (NIN), six months bank statements and Lagos State Residents Registration Agency (LASRRA) card.
She further directed that the sureties must reside within the court’s jurisdiction, be gainfully employed with an affidavit of means and evidence of three years tax payment to the Lagos State Government.
Adeola adjourned the case until Aug. 3 for mention.

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Domestic Servant Docked For Stealing Employer’s Property

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A 26-year-old domestic servant, Sharon Francis, was docked on Thursday at a Kaduna Chief Magistrates’ Court for allegedly stealing her employer’s jewellery and other items valued N700,000.
The defendant, who resides at Ali Akilu area of Kaduna, is facing a two-count charge of conspiracy and theft.
The prosecutor, Insp. Chidi Leo, told the court that the defendant and two others, still at large, committed the offences on May 15 at Malali, Kaduna.
He alleged that the defendant and her accomplices stole clothes, jewellery, three pieces of watches and two television sets, all worth N700,000.
According to Leo, the items belong to Mrs Esther Paul.
He said that the defendant absconded after stealing the items but was later arrested in Niger.
The alleged offences are punishable under Sections 285 and 271 of the Penal Code of Kaduna State, 2017.
The defendant, however, pleaded not guilty.
The Magistrate, Ibrahim Emmanuel, granted him bail in the sum of N200,000 with two sureties in like sum.
Emmanuel also ordered that the sureties should be blood relation of the defendant and have means of livelihood.
He added that the sureties should reside within Kaduna and show evidence of tax payment to the state government.
The magistrate adjourned the case until August 20 for hearing.

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Ground Rents: Asokoro, Maitama Property Owners Highest Debtors, Says FCTA

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The FCT Administration Debt Recovery Committee on Thursday said property owners in Asokoro, Industrial Area II and Maitama Districts are the highest ground rent debtors.
Mr Muhammad Sule, the Chairman, Media and Publicity sub-Committee Director, Information and Communication, disclosed this in a statement, he signed and made available to newsmen in Abuja.
According to him, property owners in Asokoro and Maitama are owing 10.67 per cent, 9.43 per cent and 9.29 per cent out of the total sum owed.
Sule said the committee was already fine-tuning legal documentations to take all property owners who had failed to pay, despite repeated warnings, to court for prosecution, revocation or outright forfeiture.
He also said that committee in the process of doing its work had discovered that many of the debtors were title holders in Asokoro, Industrial Area II and Maitama Districts, considered to be highbrow areas in the nation’s capital city, Abuja.
According to him, property owners in Asokoro District alone constitute 10.67 per cent of the ground rents defaulters.
“While the title holders in Industrial Area II and Maitama Districts comprise 9.43 per cent and 9.29 per cent, respectively.
“As the work of the Coordinating Committee on the Recovery of Outstanding Ground Rents of N29,506,643,943.98 owed the FCT Administration gathers momentum.
“Findings by the administration revealed that property owners in the highbrow areas of Asokoro, Industrial Area II and Maitama Districts are the highest debtors owing 10.67, 9.43 and 9.29 percent out of the total sum owed.
Also, property owners in other districts, such as Central Business Districts, Industrial Area I and Extension, as well as Wuse I and II are owing the Administration the tune of 8.21 per cent, 5.18 per cent, 5.1 per cent, and 4.81 per cent, respectively.”
He explained that title holders in Garki I and II, Katampe and Jabi Districts are in default of 3.4 per cent, 3 per cent, 2.21 per cent, and 2.15 per cent, respectively.
Similarly, he said property owners in other districts like Kukwaba, Gwarinpa I, Gudu, Kado, Karmo, Katampe Extention, Utako, Mabushi, Durumi, Daki-Biyu, Guzape, Jahi, Dutse Wuye, and Institutions and Research are owing various degrees of percentages.
“Thus, the committee is committed to carrying out its assignment as mandated by the FCT Administration whilst all title holders must honour their obligation to clear the debts.
“It is more honourable and responsible for property owners to rush to clear their outstanding debts because it is not going to be business as usual as the government needs these funds to fast-track the infrastructural development of the FCT.
The Tide source reports that the FCT Permanent Secretary, Mr Adesola Olusad, recently inaugurated a debt recovery committee with the mandate to recover N29 billion outstanding debts owed the FCT Administration.
The committee was directed to focus interest on ground rents and other sundry fees in the Land Administration Department as well as other stakeholder’s departments.
Meanwhile, the committee has since dissolved into sub-committees of Publicity, Administration, Legal and Finance, respectively, for effective and diligent execution of its mandate.

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