Lagos and the Tax Crunch
Let me first acknowledge that Governor Akinwunmi Ambode of Lagos State has, thus far, impressed some of us, Many had feared that given how he emerged as governor, that he would merely be an appendage of some other political moguls in the state. And that such moguls will literally be the unseen commanders and drivers of the engine of governance in the state. But Governor Ambode has proven to have his head properly screwed on his shoulders, racing on with his own ideas of rejigging and retooling Lagos.
Indeed, the entire state has literally been turned into a huge construction yard with so much mega works taking place in so many locations across the state. And the legitimate worry for some of us is how the governor is going to fund the multiplicity of projects in the state. In fact, many had worried that Gov Ambode was biting more than he could conveniently chew.
And so when he came up with a budget of over one trillion Naira, some of us knew that the pregnant snake will certainly give birth to a “long child”. In less than one month after signing the budget into Law, the Lagos State government is already rolling out “crazy” tax regimes which are expected to fund the ambitious budget.
First it was Land Use Charge (LUC), then Motor Vehicle Administration Agency (MVAA).
Understandably, there has been an outpour of outrage by Lagosians over the tax crunch being visited on them by the state government.
The Land Use Charge for instance, is hiked by 200 per cent at a time Nigerians, nay Lagosians are yet feeling the crushing effect of the economic recession. Those who have criticized the “heartless tax slam” have accused Governor Ambode of insensitivity to the plight of the ordinary struggling Lagosian.
At a recent forum, Lagos Means Business, Gov Ambode gathered the mega businessmen in the state, people like Alhaji Aliko Dangote, Jim Ovia etc., to have a review of the new rates and taxes. Of course, Dangote, Ovia and co lauded the tax initiative of the governor, but the governor must realize that is just one side of the story. The other side is frowning with vexatious disapproval.
Some have described the new law as obnoxious and bound to raise the ante of hardship in the state as the tax on Home owners will eventually be transloaded on tenants by way of increased rents to the same tenants who are already gasping in paying rents. Many may end up becoming homeless, and hit the streets and become nuisances.
The governor has explained that the homes of pensioners will be exempted from the tax crunch, just as the focus will be on commercial buildings, but the fact remains that the geometric increase in the tax will produce hardship among many Lagosians.
What is worse, in many of these homes, government’s input is still very absent. Many residents still depend on their own boreholes as source of water, they generate largely their own electricity, provide their own security, with many gated streets and estates, and in some cases, residents constructed and continue to maintain the access roads to those same homes, Lagos wants to come and collect 200% LUC. It is as pepperish as it smacks of oppression.
Next is the so-called MVAA, which raised rates by over 1000 per cent. Haba! Under the new proposed rates for instance, a taxi seeking registration or renewal of its vehicle particulars will now pay N40,000 as against N3,525 it used to pay. The same goes for Kabu-kabu, car hire. In the same vein, mini buses and pick up vans which used to pay N2,500 will now have to pay N20,000. And it goes on and on for all other categories of road users even including Okada riders. Under the new tax regime, Lagos will become verily uncomfortable to the poor.