Business
LASG Explains Controversial Land Use Charge
Amid the complaints about the new Lagos State Land Use Charge, the Commissioner for Finance, Akinyemi Ashade, says an aggregated tax that has combined three erstwhile separate taxes namely tenement rate, ground rent and neighbourhood improvement levy into one.
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 property 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 categorization. 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 property but considerably lower than `commercial’ property.
“Commercial property are those property 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.
He said that in 2017 for instance, properties were paying charges based on rates that were last determined in 2001, adding that clearly, after 16 years, those charges had largely become obsolete.
The commissioner said that property valuation did not appear to always follow a uniform standard and that there were often stark variations in property valuation that were inequitable.
“Furthermore, property enumeration did not appear to be proceeding as fast as it ought to and a considerable chunk of property was actually not paying this charge.
“These were some of the inefficiencies in the old Land Use Charge regime that prompted the Lagos State House of Assembly to repeal the old law and promulgate a new one.
“In the course of today’s trending debate on Land Use charge, some commentators have tried to create the impression that the Lagos State Government arbitrarily, without engaging or consulting different stakeholders, increased the Land Use Charge rates payable in Lagos.
“This is not true. The process of the review of the old law and promulgation of the new Land Use Charge Law by the Lagos State House of Assembly was elaborate and painstaking,’’ he said.
Ashade said the draft legislation was rigorously interrogated and debated at the Assembly not only at committee level but over two separate hearings and that memoranda were invited from dozens of stakeholder groups, including civil society groups, community development associations, leadership of local government councils and local council development areas.
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.
Edun made the call while speaking at the 2025 Fellowship Investiture of the Chartered Institute of Bankers of Nigeria (CIBN) in Lagos, where he reaffirmed the federal government’s commitment to sustaining ongoing reforms and expanding access to finance as key drivers of economic growth beyond four per cent.
“We all know that monetary policy under Cardoso has stabilised the financial system in a most commendable way. Of course, it is a team effort, and those eye-watering interest rates have to be paid by the fiscal side. But the fight against inflation is one we all have to participate in,” he said.
The minister stressed the need for banks to broaden credit access and finance innovation-driven enterprises that can create jobs for young Nigerians.
“The finance and banking industry has more work to do because we must finance their ideas, deepen the capital and credit markets down to SMEs. They should not have to go to Silicon Valley,” he said.
The minister who described the private sector as the engine of growth, said the government’s reform agenda aims to create an enabling environment where businesses can thrive, access funding, and contribute meaningfully to job creation.
The facility, known as the Nigeria Actions for Investment and Jobs Acceleration (P512892), is a Development Policy Financing (DPF) operation scheduled for World Bank Board consideration on December 16, 2025.
According to the Bank’s concept note , the financing would comprise $500m in International Development Association (IDA) credit and $500m in International Bank for Reconstruction and Development (IBRD) loan.
If approved, it would be the second-largest single loan Nigeria has received from the World Bank under President Bola Tinubu’s administration, following the $1.5 billion facility granted in June 2024 under the Reforms for Economic Stabilisation to Enable Transformation (RESET) initiative.
The World Bank said the new programme aims to support Nigeria’s shift from short-term macroeconomic stabilisation to sustainable, private sector–led growth.
“The proposed Development Policy Financing (DPF) supports Nigeria’s pivot from stabilization to inclusive growth and job creation. Structured as a two-tranche standalone operation of US$1.0 billion (US$500 million IDA credit and US$500 million IBRD loan), it seeks to catalyse private sector–led investment by expanding access to credit, deepening capital markets and digital services, easing inflationary pressures, and promoting export diversification,” the document read.
The document further stated that Nigeria’s private sector credit-to-GDP ratio stood at only 21.3 per cent in 2024, significantly below that of emerging-market peers, while capital markets remain shallow, with sovereign securities dominating the bond market.
To address these weaknesses, the DPF will support the implementation of the Investment and Securities Act 2025, operationalisation of credit-enhancement facilities, and introduction of a comprehensive Central Bank of Nigeria rulebook to strengthen risk-based regulation and consumer protection.
The operation also includes measures to deepen digital inclusion through the passage of the National Digital Economy and E-Governance Bill 2025, which will establish a legal framework for electronic transactions, authentication services, and digital records.
Beyond the financial and digital sectors, the programme targets reforms to lower production and living costs by tackling Nigeria’s restrictive trade regime. High tariffs and import bans have long driven up consumer prices and constrained competitiveness, particularly for manufacturers and farmers.
Under the proposed reforms, Nigeria would adopt AfCFTA tariff concessions, rationalise import restrictions, and simplify agricultural seed certification to increase the supply of high-quality varieties for maize, rice, and soybeans. The World Bank projects that these measures will help reduce food inflation, attract private investment, and enhance export potential.
The operation is part of a broader World Bank FY26 package that includes three complementary projects—Fostering Inclusive Finance for MSMEs (FINCLUDE), Building Resilient Digital Infrastructure for Growth (BRIDGE), and Nigeria Sustainable Agricultural Value-Chains for Growth (AGROW)—all focused on expanding access to finance, strengthening institutions, and mobilising private capital.