Expert tasks LASG on improved communication, education of tax payers

A tax expert, Taiwo Oyedele, has appealed to Lagos State Government to improve its communication and engagement with stakeholders on the revised Land Use Charge Law.

Oyedele, the Head of Tax and Regulatory Services, PricewaterhouseCoopers (PwC) Nigeria, made the appeal in an interview with the News Agency of Nigeria (NAN) in Lagos on Friday.

He said that government should invest more in taxpayer education and sensitisation on the various taxes in the state, how they worked and computed to prevent misinterpretation and controversy.

NAN recalls that Lagos State Government recently repealed it’s 2001 Land Use Charge Law and replaced it with Land Use Charge Law, 2018.

The Land Use Charge Law, which is meant to increase the state’s internally generated revenue and expand its tax base, has generated controversy among members of the public.

“Government needs to communicate better and engage people more.

Maybe the implementation of when the law was announced was too quick and people did not have enough time to digest it.

“It is important for the government to clarify and simplify the computation so that an average property owner can compute it without any external assistance.

“There are lots of miscalculations and misinformation on the social media because people do not understand how to calculate it.

“On an N100 million worth of an owner-occupied property, you would pay less than N50, 000 per annum.

“If the N100 million property was for the commercial purpose, that is you are renting it out, you would pay about N200, 000.

“Effective communication for development is necessary to amplify the voice, facilitate meaningful participation and foster social change,” Oyedele said.

He said that the land use charge law and rate had not been reviewed for over 15 years, adding that the new law was a consolidation of three different taxes.

“Even, though many people are focusing on the percentage increase in the charge, saying 400 or 500 percent increase is high; that is true.

“The other side of the narrative is that many people were paying like N10, 000 on a property that is worth N100 million, and that has now been reviewed to like N40, 000 or N50, 000.

“The value of property, rent and exchange rate has gone up in the past 15 years, while the land use charge did not increase,” he said.

He, however, said that there should be a review for the land use charge of the Owner Occupied Commercial Property which was like 10 times higher than Owner Occupied Property charge.

According to him, to attain the level of development that will improve the global competitiveness of the state and bridge the infrastructure deficit, tax compliance has to improve.

He said that tax revenue of Lagos was low compared to other megacities like Johannesburg, New York and Hong Kong.

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“Lagos State Internally Generated Revenue (IGR) for 2017 was just about $1 billion which is about N360 billion, whereas other cities similar to Lagos got higher, Johannesburg collected about $4 billion.

“Government said that it expected about eight million people in the tax net, but has about four million people; out of which two million filed returns and only 700 thousand paid taxes.

“The reality is that not everybody, who claims to be paying tax, is actually paying and some who are paying are not paying the right amount, otherwise, government’s IGR would not below.

“All the developed countries we want to be like, pay tax and use it for development.

What Lagos plans to do cannot be done with $1 billion per annum generated, part of which they would pay salaries of N10 billion per month,” he said.

According to him, community development projects undertaken by residents are more expensive than if government utilises taxpayers money to implement such projects in sustainable ways.

He urged professional bodies, chambers of Commerce, NGOs, labour unions and activists to champion actions to hold government accountable to the citizens in its spending.