It may have come late, but that it came at all is a relief. The offer to dialogue on the matter of the new Lagos Land Use Charge made by the State Governor, Akinwunmi Ambode, last Tuesday, when he met with business leaders, suggests to us that his government takes public outcry over policies seriously.
The new Land Use Charge law has, indeed, raised a lot of uproar from private and corporate citizens in the state, who think it is steep and unfriendly.
The planks of the many arguments that have been advanced have been two folds. One is that the conditions are not the right ones for the implementation of a new law demanding more money from citizens. Two is that the rate of increase is excruciating.
We think that the first plank in the arguments shows that there is a tacit agreement with the state about the need to pay Land Use Charge, even an upwardly reviewed one. But those who hold this view believe that it should be implemented in a way that can be accommodating to them.
The second plank in the arguments also supports payment of Land Use Charge, but would rather see a more moderated level of increases. The offer of dialogue, instead of the resort to threat that often is the hallmark of non-democratic governments, may have seen the Ambode government go into its “Explanation Mission”, immediately following the meeting with business leaders.
The explanations did put some clarity to some of the issues that had been raised, especially the one that had to do with an astronomical rise in the land use charge that property owners are supposed to pay.
Now, we know that the high figures that have been talked about are as a result of years of arrears that have been calculated; and that the actual figure, using valuation of N20 Million, is as low as N9,120 per annum for an owner-occupied property.
It is, therefore, a property which is commercialised and money is being made on that Land Use Charge is likely to be high, but affordable within the income expectation of the owner.
We know that the matter of citizens’ financial obligations to the state, in the form of taxes, levies and land charges, receive similar public reactions all over the world, whenever they are increased. But citizens’ concerns when promptly responded to by way of explanations offered through dialogue, often help to ease tension.
The Ambode Government, in our view, has done well in its efforts to quickly break down the complexity that came with the initial release of information about the Land Use Charge.
The offer of a 40 percent relief to property owners and the correction of information about outrageous figures that circulated widely are also a welcome relief.
As a financial newspaper, we believe that the people and corporate citizens of the state must not lose sight of the overriding reasons behind the Lagos State Government wanting to review the 2002 Land Use Charge law, which was meant to be reviewed in 5-year intervals, but had been left untouched for 16 years.
If the necessary reviews had been done by the State’s Legislature, there would have been three reviews and the third would have happened last year; and there may not have been this kind of reaction. It is our view that Lagos represents a shining example of a state that its governments, since 1999, have tried to run with a good sense of a fiscally free state.
Each successive government , especially following the incident that led to a disagreement with the Federal Government, and as a result, the suspension of Federal Allocations to the state by the Olusegun Obasanjo-led Federal Government, has reconfigured its thinking to act as a fiscally federated state.
We think Lagos’ example serves to show the rest of Nigeria what is possible, if only the government at the centre can embrace true federalism.
The state is working very hard to raise revenues to meet its ambitious plans for a state that has become an oasis, attracting citizens from different parts of the country and investors from all over the world, to eke out their daily living, and make good Return on Investment (RoI).
It is this coalescing of different classes of people, local and global, that the state must respond to, which means that its funding needs are increasingly on the rise.
We, therefore, agree that the state is revenue-challenged, when matched against its developmental needs. It must expand existing revenue channels and find new sources to fill the gap between revenues and expenditures. It is not made easier by the fact that the state has a governor that fully understands the need to create a modern subregional that can respond adequately to the challenges fostered by its very demanding cosmopolitan character.
It is even made more challenging by an ambitious Governor Ambode, who is in flight to create a modern state fit for purpose, fit for the 21st Century and beyond, and fit for its inhabitants.
It is our view, therefore, that while faced with these challenges, a new law requiring more taxes, levies, rates, land charges, must be properly and adequately communicated to both individuals and corporate entities.
So, we welcome the opportunity offered by the governor for dialogue with the people and businesses in the state.