THE Nigeria Employers’ Consultative Association (NECA) has accused the Lagos State government of being insensitive and inhumane to corporations and residents within the state.
Speaking at a press conference in Lagos on Thursday, in a reaction to the recently signed Land Use Charge 2018, the President of NECA, Mr Larry Ettah, stated that the government must realize that sensitivity and humaneness
are classical cases of insensitivity, alienation and gross disregard of the current state of wellbeing of both corporate and residents.
According to him, “The recent amendment of the land use charge law is a classic case of insensitivity, alienation and gross disregard of the current state of wellbeing of both corporate and residents. In reality, the new law will expect property owners in Lagos State to pay at the very minimum a monstrous, appalling and callous increase of over 200 percent and in some instances over 500 percent in Land Use Charge. It is not as if the income of a property owner has gone up significantly to justify this outrageous law.”
Moreso, he argued further that the real estate sector continues to wallow in a deep recession with high vacancy rates.
“How on earth would any decent authority increases taxes overnight by over 200 to 500 percent when in reality 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 125-200 percent, if payment is not made between April and August,” he said.
He said the Organised Private Sector (OPS) finds the law intolerable and brutish. He said OPS will do everything legal and legitimate including social resistance to challenge, according to him, unfair and unjustifiable law.
“We put the Governor (Akinwunmi Ambode) on notice that this law in its current form is not acceptable and the OPS will fight this law by social resistance and any other legitimate means at its 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 is 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,” he said.
The NECA boss said the law also contains some provisions including penalties for default in paying the LUC within the period specified in the Demand Notice attracts the following penalties: (a) 25% penalty on the LUC Demand Notice Rate not paid between 45 to 75 calendar days; (b) 50% penalty on the LUC Demand Notice Rate not paid between 75 to 105 calendar days; and (c) 100% penalty on the LUC Demand Notice Rate not paid between 105 to 135 calendar days.
Where the LUC Demand Notice is not settled after 135 days of the Tax Payer’s receipt of the Demand Notice, the Lagos State Government is authorised by the LUC 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.