Land Use Charge: Template in responsive governance

“Anyone can hold the helm when the sea is calm” – Publilius Syrus

Governor Akinwunmi Ambode had famously promised in 2015 when he assumed office: “I shall run an open government of inclusion that will not leave anyone behind. No matter your age, sex, tribe or any other status. As long as you reside in Lagos, we will make Lagos work for you.”

Such promises are not in short supply in our polity, but often when the sea turns turbulent, we find that the hands holding the helm becomes shaky when steadiness is required, panicky when composure is needed and timid when decisiveness will suffice. Thus, such promises often go unfulfilled. Society desires a firm hand at the helm in good times and in challenging times to ensure stability and attendant progress.

There are different strata of society with sometimes completely contrasting desires, needs, demands, and expectations. For a highly diverse cosmopolitan state like Lagos this is even more so, and so making such a bold promise is froth with possible failure and many other risks. Governor Ambode surely knew this, yet it was apparent he was sincere about the promise. The governor must equally have realised that the basic foundation of an inclusive administration is good governance, built on dedication, openness, vision, character, humanity, and decisiveness. The recent controversy surrounding the new Land Use Charge law has helped to throw the good governance posturing of the Lagos State government, particularly its humane face, in sharp relief.

The state government had repealed the 16-year-old Land Use Charge law and enacted a new one, to, among other reasons given by the government, make the law relevant, efficient, equitable and more transparent. There was a huge outcry by Lagosians over the new law. Some were against the timing of the law, others against the valuation method used, while some others kicked against the rate of increment, some against even the review while many more disagree with the penalty for default. Many who objected to the new rates have argued that it will merely increase the cost of living in Lagos thereby putting unnecessary financial burden on the already impoverished many in the state.

In demonstration of good governance and perhaps mindful of its 2015 promise of inclusiveness, the government took all the objections on board, engaged the populace at different fora and across different segments where it assured them that the Land Use Charge law will be implemented with a human face. It is fair to say, however, that even before the law was enacted, the administration had taken the pains to ensure it meets the basic requirements of fairness and equity. For instance, there was a public hearing by the state assembly on the Land Use Charge bill, where the lawmakers had a robust engagement with Lagosians: individuals, businesses, organizations, and trade unions, etc before it was passed. The engagement and its outcome, no doubt, informed the final wordings of the law, especially the liberal reductions in the rate.

Reliefs were sought at the hearing and the state gave 40% off the value of property across board, with an additional 15% for early birds, among other reliefs the law granted. So, for instance, a property valued at N10 million will be taxed at N4.5 million if the 40% general relief and the 15% special relief are applied. Pensioners were exempted from payment if the property is owner occupier, properties used for common good, such as religious centres, town halls, etc were also exempted.

Despite these reliefs and exemptions, the government was still willing to give further concessions and it said so at different engagement platforms. Governor Ambode repeatedly assured Lagosians that the government was ready to dialogue and, if necessary, to bend backwards in order to accommodate everybody to ensure Lagosians do not experience more pains. Ordinarily, such assurances by governments in this country are considered sound bites and are taken with a pinch of salt. One aggrieved commentator had remarked that our leaders have a “habit of forcing down the populace’s throats unpopular actions, which they apologise for after the fact knowing that the citizenry have a tendency to shrug things off easily and move on with their lives.”

So, many rightly brushed aside the dialogue comment by Governor Ambode. In a sign of good faith, however, the state government shocked the doubters and proved that it actually listens to the people when its executive council, headed by Governor Ambode, sat and agreed to slash the rate by a hefty 50% for commercial property (tenants only rental property) , 25% for owner-occupied commercial (landlord living with tenants), and 15% for owner occupied (landlord living alone in property), gave concessions for installment payment, and removed the penalty for late payment.

For better understanding, the 50% rebate is on the demand notice rate, that is, after the 40% relief, and other initial reliefs, the final property tax to be paid will further enjoy the above rebates. An owner-occupied property valued at N20 million will first enjoy the 40% relief, making it N12 million. The Land Use Charge on the N12 million will be N9,120 per year when the charge rate of 0.076% is applied. Based on the new 15% rebate, the owner pays N7,752 per year. A N20 million commercial property with the same 40% rebate and later charged at 0.76% rate is expected to pay N91,200 tax. But with 50% rebate, the property pays only N45, 600 per year. And for an owner-occupied commercial property, with the same initial reliefs and then charged at 0.256% rate, tax payment for a year is N30,720. With the new 25% rebate, the property pays only N23,040 yearly.

In truth, the Lagos State administration has shown time and again that it is a listening one, with the interests of the populace uppermost in its heart. Shortly after resuming office, Governor Ambode had reviewed the activities of many of its agencies based on complaints against some of them by Lagosians and taken actions in favour of the populace. Notable examples were the Lagos State Traffic Management Authority (LASTMA) and the Vehicle Inspection Officers (VIO). Due to complaints of extortions and causing traffic jams, the governor permanently banned VIOs from Lagos roads and warned LASTMA to desist from forcefully taken possession of perceived traffic offenders’ vehicles.

Other people-oriented policies by the administration include the establishment of the Lagos State Trust Fund, set up to provide financial support to residents of the state in their entrepreneurial drive to help create jobs, tackle unemployment and create wealth. To ensure it runs a lean government and be fiscally responsible, in line with the people’s expectations, Governor Ambode pruned its ministries, departments and agencies (MDAs). The Ministry of Rural Development was removed, so was the Office of Political and Legislative Powers Bureau, among other impactful reforms.

The administration also continued to fix both the physical and social infrastructure of the state, consolidating on the previous government’s efforts while building new ones to ensure the quality of life in the state is improved. It is certainly not an easy task to satisfy the yearnings of a hugely diverse population like Lagos’. But a good place to start will be good governance and a steady hand at the helm in calm or turbulent sea. The Lagos State government, with this recent move, may just have shown that it can be trusted.

SEUN OLAMILEKAN