Emmanuel Ekene Nnamani, executive chairman Enugu State Internal Revenue Service, in this interview with Regis Anukwuoji, explains why the state is embarking on automating land use charge payment and management, among other issues. Excerpts:
What is this land use charge all about and what do you intend doing?
Land Use Charge is a tax we collect on every property owner in the state. The Land Use Charge is supposed to be the mainstay of our revenue, but over time because it has not been scaled up the way we had wanted it, we have been dragging our feet in ensuring that we generate enormous revenue using the Land Use Charge. In the recent days, the governor of the state deemed it fit that we should scale up revenue generation using Land Use as much as possible. We want to announce to the residents of Enugu that Enugu State is automating Land Use Charge payment and management, we have been managing our Land Use Charge using manual process or semi-automated process whereby we generate demand notice and we deliver it through agents and we demand for payment and enforcement. What the government did was to buy into a Geographic Information System (GIS). The GIS shows all the property in Enugu State within the metropolises even in the villages. So, these properties in our state have identifiable head counts and have been programed into the system called GIS; that geographic information system will help the internal revenue service and the entire Enugu State to generate demand notice automatically. It will also help us identify each of the property in the state that has paid his or her own Land Use Charge. It will also help the state residents to also go into the same porter to identify their own property and check whether the payment they have done has been updated in the system; so, that is how we programed and want to tell the whole world what we are doing. When the governor of the state took over the mantle of leadership, he promised Ndi Enugu a disruptive innovation. Part of the disruptive innovation is this introduction of geographic information system for management of our land properties and also other services that have to do with property. The GIS will help us in very near future to enable citizens apply for their C-of-O without having to come to the Ministry of Land. Very soon, we would not need to file hard copy application for land use discharge; all these things we are doing is to ensure that Enugu key into the technology-adopted states and Enugu, I believe has all it takes to be among the leading technology in the country because we have very many tertiary instructions and Enugu is known to have many of its citizens educated, hence, we are telling everyone that we are going digital in the management of our Land Use Act.
What was the land use charge in the state like before you came into office?
Before we came into office the land use charge that were dominantly paid by commercial bodies and banks only, hardly was it extended to residential so many residential who are telling you that they have been paying land use charge may not have the evidence to provide. Recently we did land use charge calibration and the fee people pay are dependants of the value of the land in that particular location. Land use charge is dependants on the value of land, so what we did has a formula we use in calculating it and our land use charge is categories into commercial, residential and Industrial. We have also other categorisation such as schools, church, educational institutions government Assess etc. So, but what we did is there are places the land value is very high such places like the GRA, Independence layout, Zoo Estates, Ebeano estates, Gulf estate, the value of lands in these areas are very high, where a plot of land sale for above N100 million. But government valuation is different from the actual valuation; government valuation is usually reserved; it is usually lower in the value you get in actual market exchange. So, what we did was to categories this land and their valuation and raise land use charge in accordance with the valuation; for instance, people who live around all these areas I have just mentioned- GRA, Okpara Avenue, Fidelity Estate- a plot of land goes for 7million which is far below what those plots of land can sale; so, the land use charge for those areas areN260,000 and can go as high as N335,000 for industrial and N500,000 for commercial. However, outside these areas mentioned, if you begin to go into the down part of the city like Trans Ekulu, the price of the land use charge is N76,000 yearly, but if you go to Abakpa, it isN38000, Emene, is about N26000, while 9th Mile is paying around N26000. There are some areas that pay as low as N15000 and N3000 like Oji-River, while Gariki side pays N57000 per year.
So, you can see that the land use charge is dependent on the value of the land; whoever lives in Abakpa pays N38,000 and whoever lives in Trans-Ekulu not minding the standard of Trans-Ekulu, pays N56,000; however, those that stay outside pay minimal; very minimal. In Udi, you can pay N7000, that is how we have categorised our land use charge; mind you that empty land equally pays.
Do you have the accurate number of buildings that should pay?
In accordance with our GIS, we have 800,000 properties across the state.
What about ancestral homes will it also pay the land use charges?
Ancestral homes will equally pay because the occupants equally benefit from government programmes and projects like schools and hospitals. We should understand that the money paid is what the government is using to maintain the schools and hospitals, pay salaries. In this part of the world, we have not deeply implemented the revenue collection and when we fail to collect revenue where we are supposed to collect it, there is no way government could make money. At times, we assess government based on the money shared, or bags of rice it has shared or even roads, yes, these are government responsibilities, but nobody can say he is not benefiting from government, that is why this Land Use Charge has to be paid even in our ancestral homes. In some villages, they pay something very infinitesimal; some can be N2000; some can pay N1000, depending on when we begin to scale it. We have only captured 56 zones in the metropolises which include Enugu urban, Agbani, Udi, 9th Mile, Nsukka, Ogurute, Obollo Afor and Oji-River we category as Urban city for now, but we have other 200 zones that are within the domiciliation of the villages
What is the difference between Land Use Charge and Ground Rent?
In accordance with our Land Use Charge Law of 2016, which says that every property in the state must pay land use charge, and land use charge is different from ground rent that is what the law says, but land use charge consolidates every other land-based payment such as tenement rate, all sorts of land charges; so, whoever lives in the state can only pay ground rate and land use charge. Ground rate is payable to who gave that land, who leased the land to you. So, if it is the Ministry of Land that you got your lease from, you pay Ministry of Land ground rate; it you got your land through housing development you pay ground rate to them, etc. But for land use charge every single property pays to Enugu State Internal Revenue.
How may these charges help investors coming into the state?
Let me tell you that it will not affect any investor because I don’t know how land use charge will affect investor and investor who comes to Enugu to buy a plot of land at Zik’s Avenue at N50 million or N60 or N70million as the case may be, and probably spends N300 million to construct the property on that land, I want to know how N266,000 is what will stop him from investing; it is totally infinitesimal and inconsequential. If I am the one, it will not stop me and again the land use charge is becoming a very prominent revenue for every state. Lagos State had piloted their own, that you can’t have a property in Lagos without maintaining the property on yearly bases on land use charge. They have gone far; the same thing in Ondo; Anambra also has its own; we are piloting our own; Imo is on it and Ebonyi State is kick-starting their own. Every state is keying into the land use charge; it is not a disincentive to any investor. It is not, for me somebody who has the money for those high-cost areas is fit-for-a purpose and he can maintain his land. For those who do not have land in those high places their own payment is very small and affordable. We also have many options of payment even using your phone or you come to the office.
What is your target or expected revenue from the Land Use Charge in a year?
Our target is to raise billions of Naira through this land use charge; so, we are targeting that all, things been equal, through the acceptance of me and you-the residents of the state- we can raise over N20 billion this year using land use. By next year, we are going to scale it up.
What happens to defaulters?
Enforcement: We enforce it serving demand notice to the people and if they fail to pay, we serve them warning notice, if they fail to pay after serving them warning notice, you give them notice that you are going to sue them to court; that is the intension to sue and if they fail to respond, we take them to revenue court that has the right to say what should be the next line of action to be taken. Enugu example has shown us that the money you pay as revenue is being used well.
