For those who have not come upon the governor’s reaction to the public outcry concerning the new Land Use Charge Law in Lagos, I am sharing his words (in italics) and my thoughts with you. “This tax, the law was made in 2002. It provides there that every five years we should review it and also, find a way to increase it. 2017, fifteen years after, it’s never been reviewed. So, let’s play back in time. So those who are actually having commercial properties, the rental income they were getting in 2002 as against the rental income they are getting in 2017, fifteen years after has remained the same, is that correct? (a chorus of no) Ehn? (chorus: no, then applause). Wait, the issue is this, the level of infrastructure that existed in 2002 as against what has happened in the last 15 years, are they the same? Did it not come at a cost? So why is the market value of the property that you built… you built it with one million, fifteen years after you are selling at twenty million, how did you make profit? Why do you think somebody who is a buyer will pay twenty million for it? Is it not the facilities around your property? You have to pay a price. That’s how it works everywhere. I believe I speak for everyone in Apapa when I ask, what infrastructure? Is it the infrastructure that has made a fifteen-minute journey to Lagos Island a three-hour journey? Is it the infrastructure that has allowed five armed robberies in broad-day light in the past three weeks in Apapa? Is it the infrastructure that has left over half of the residential and commercial properties in Apapa vacant? Is it the infrastructure that has forced landlords to rent out their property at half the rates they were asking only a few years ago? Is it the infrastructure that has turned the roundabouts in Apapa to refuse dumping sites? Is it the infrastructure that daily threatens the life and property of the citizens of Apapa? What infrastructure, pray tell, is someone in Apapa, for instance, supposed to be thankful for? If I built a property for one million and it has increased to twenty million and you want to take advantage of that every year, does that mean that the Lagos State Government and its grubby, tax-grabbing fingers will stay out of the capital gains if and when I decide to sell the property? I am no economics guru, but this sounds like excessive taxation to me. When people in government say things like, “That’s how it works everywhere,” it reminds me why I struggled as an economics major in my undergraduate studies. From the very first lecture I had in economics, I knew that I would have problems. The lecturer drew several models on the board, explaining demand and supply, and every other word she said was punctuated with the latin phrase, ceteris paribus, meaning all other things or variables remaining the same. But neither life nor economic models translate ceteris paribus. For instance, when I lived and worked in New York, every year my salary was guaranteed to rise by at least the rate of inflation. That was the basic increase that every employee in the organisation was entitled to. Any other increase was performance-based. When my salary has not kept up with the rate of inflation and on top of my reduced purchasing power I am expected to squeeze blood out of a turnip to pay rates increases, is that how it works everywhere? To receive electricity, running water, and other utilities, I paid my utility bills certain that I did not have to shell out extra money to supplement the public utility services. When I pay my monthly Lagos State Water Corporation bills and eventually have to sink a borehole because the Water Corporation pipes leading to my house remain dry for months, and now you want to charge me annually for this borehole, is that how it works everywhere? Government is quick to justify punitive policies with the blanket, “That’s how it works everywhere.” How about copying how things work everywhere where governments are lean and accountable to the people? The principle of taxation is a social contract between government and citizens. Citizens are more willing to pay taxes when the government provides public services, respect for the rule of law and accountability. Like most contracts, it is a bargain between the parties — government and citizens. Since we are talking about how things work everywhere, the global trend in taxation is concerned not just with how much taxes are raised from the citizens, but how those taxes are raised. The manner in which a government goes about collecting taxes can poison its relationship with the citizens. This is where we are in Lagos. There is a global shift away from coercive policies to more consensual policies in taxation. Lagos State cannot claim to be a progressive state on one hand and act like they are in a one-sided relationship on the other hand. There is nothing progressive about arbitrary, autocratic governance trying to pass itself off as a democracy.

  • This article was written before the downward review of the Land Use Charge on Thursday
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