The Nigeria Employers’ Consultative Association has kicked against the recent amendment to the Land Use Charge Law in Lagos State, saying it will resist its implementation.
NECA described the amendment as “a classic case of insensitivity, alienation and gross disregard of the current state of wellbeing of both corporate organisations and residents.”
It stated at a press conference on the state of the economy in Lagos on Thursday, “The new law would expect property owners in the state to pay at the very minimum a monstrous, appalling and callous increase of over 200 per cent, and in some instances, over 500 per cent in Land Use Charge.”
The President, NECA, Mr. Larry Ettah, said, “We find this law intolerable and brutish. We will do everything legal and legitimate, including social resistance, to challenge this unfair and unjustifiable law.
“We put the governor on notice that this law, in its current form, is not acceptable and we will fight this law by social resistance and any other legitimate means at our disposal to get the government to ameliorate the harsh impact of the abhorrent law on residents.
“We believe in the context of a democracy that it is important that truth be spoken to power. We hope the government will not be obdurate and see reason as to why this law is unfair as it is insufferable.”
In its bid to increase its internally generated revenue and expand the tax base, the Lagos State Government recently repealed the 2001 Land Use Charge Law and replaced it with the new Land Use Charge Law 2018.
The government also extended the period for the payment of all Demand Notices for the annual Land Use Charge to Saturday, April 14, 2018.
This is to enable property owners and affected occupiers take the option of enjoying the discounts available for the prompt and early payment of the LUC invoices.
However, Ettah said it was not as if the income of a property owner had gone up significantly to justify the outrageous law.
He added, “More so, the real estate sector continues to wallow in deep recession with high vacancy rates. How on earth would any decent authority increase taxes overnight by over 200 to 500 per cent when the government should be doing more to stimulate the sector to come out of recession?
“To compound matters, there is a repugnant and odious penalty payment ranging between 125 and 200 per cent if payment is not made between April and August.”
According to him, penalties for default in paying the LUC within the period specified in the demand notice attracts a 25 per cent penalty on the rate not paid between 45 to 75 calendar days.
It also includes a 50 per cent penalty on the rates not paid between 75 to 105 calendar days; and 100 per cent penalty on the rates not paid between 105 to 135 calendar days.
Ettah stated, “Where the LUC demand notice is not settled after 135 days of the taxpayer’s receipt, the Lagos State Government is authorised by the LUCL to appoint a temporary receiver/manager to administer the property until all the outstanding taxes, penalties and administrative charges are paid.
“Basing the annual Land Use Charge rate on the market value of a property is an inequitable form of taxation as the owner of the property is not, as a matter of fact, receiving the market value of the property on an annual basis.
“Using the market value of a property to assess its LUC on an annual basis is also deemed to amount to a subtle form of double taxation as Capital Gains Tax is paid every time the property is sold or bought.”
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