Manufacturers reject Ambode’s LUC, despite reduction
The Manufacturers Association of Nigeria (MAN) has insisted that the Lagos State Government should have a re-think on its controversial Land Use Charge (LUC).
The association maintained that the new rate rolled out by the government was still high and that the charge would do more harm than good to the economy of the state.
Lagos is Nigeria’s economic capital and home to many industrial concerns.
The President of MAN, Dr Frank Jacob, told newsmen on Saturday in Lagos that the Akinwunmi Ambode administration needed to think deeper before putting the charges in place.
Jacob argued that the global best practice was to tie increase in charges and rates to the country’s inflation rate.
On March 15, the government reduced commercial charges by 50 per cent, owner-occupier with third party, including industries and manufacturing concerns by 25 per cent and owner-occupied property by 15 per cent.
It also waived penalty for late payments across board and tax credits for LUC charges already paid and introduced installmental payment system.
“We still maintain that the rate is high. The current rate of inflation in the country is between 14 and 15 per cent.
“We think that the increase the Lagos State Government is proposing to do should not be more than 25 per cent of what was paid the previous year and not the current rate reduction of 25 or 50 per cent for property owners.
“If we have 200 per cent increase and it’s reduced by 50 per cent, it means that people are still paying 100 per cent of what they were paying before and that is too high.
“The rate of any increase should not be more than the prevailing inflation rate of the country, so that it would be easy for people to pay and also to maintain survival of the manufacturing sector.
“We hope the government would do more than what they have just done. It is encouraging that they listened to the cries of the people but I do not think they have done enough,” Jacob said.
Similarly, Mr Muda Yusuf, Director-General of the Lagos Chamber of Commerce and Industry (LCCI), said that the chamber’s stand on the discounted rate would be revealed after diligent scrutiny of its details and economic impact on citizens.
He commended the Lagos State Government for its positive response, adding that the reviewed rate revealed that the voice of the people mattered in a democratic environment.
“It is a positive response by way of reducing the charges, waiving the penalty for late payments and introducing instalmental payment.
“We are still studying the details of the reduced rates, after that we would know whether to reverse our position or maintain our stance,” Yusuf said.
The LCCI and MAN had earlier called for the suspension of the LUC, while stating that its conditions negated Federal Government’s initiatives for enhancing growth of manufacturing sector and that it was not in tandem with democratic ideals and norms.
The Lagos Government had recently repealed its 2001 Land Use Charge Law and replaced it with a new Land Use Charge Law, 2018, which was signed on Feb. 8.
Based on the law, new rates were sent to property owners and those who received the bills stated that the LUC represented an increase of between 150 and 400 per cent over the 2017 rate.
The LUC Law which was meant to increase the state’s internally-generated revenue and expand its tax base had generated controversy among the public.
The Ikeja Branch of the Nigerian Bar Association and other non-governmental groups took to the streets to protest against the LUC.