The Lagos State Commissioner for Finance Mr. Akinyemi Ashade has said that the state would need about $50 billion to tackle infrastructure deficits in the state within the next five years.
Speaking to Journalists on Tuesday at the Alausa Office, Ikeja, Lagos, during an interactive session, Ashade said that the state intends to channel the proceeds from the Land Use Charge to provide infrastructure to Lagosians.
He noted that the increase in the LUC was progressive because it collapsed three previous taxes into one. Ashade said that the previous LUC which became obsolete was supposed to be reviewed every five years but was not updated for 16 years hence the new LUC which, captured current economic realities
“In the next five years, we will need to continue to renew our infrastructure and build new ones. To do this, we would need to spend $50 billion. With this, if we have to spend all our budget without doing anything, it will take 19 years to be able to fix the deficit,” he said.
According to him, if the state government borrows money to meet the need, it would be at high interest rates, hence, the new tax regime – property taxation system.
Ashade explained that the LUC had different rates for property owners and relief of 40 per cent across board.
According to him, the state government will implement the new tax regime with human face.
“Trust us with the tax, we are going to invest it in infrastructure judiciously,’ he said. He said that the new LUC was progressive and graded, adding that it allowed people to value their property by themselves.
The official also said that the new LUC was factored in ease of doing business. He said that under the Land Use Charge Law, owners occupiers would be expected to pay a percentage of 0.076 per cent of the value of the assessed property. He gave the assurance that the government would protect tenants whom landlords might want to exploit because of the LUC.
The News Agency of Nigeria (NAN) reports that the newly-introduced LUC has attracted widespread criticism from property owners, developers and investors.
Some have raised fears of reduction of investments in real estate in Lagos. The new Land Use Charge Law (LUCL) 2018, which applies to real and landed property in the state, consolidated all property and land-based rates/charges into a single property charge and set modalities for levying and collection of the charge.