Edo State Land Use Charge Law 2012: Other Side of the Edo State Property Tax

Gov Oshiomhole

By Ebomhiana Musa.

The media, especially the electronic in Edo State have been awash with issues relating to the state Land Use Charge Law 2012 following government pronouncement last week of its readiness to start its full implementation, three years after its enactment by the state house of assembly. The main opposition party in the state, People's Democratic Party, PDP has been in the forefront of the avalanche of strident criticism against this property tax, wearing it the garb of a draconian law that has come to sound the death knell of all property owners in the state. This is a clear case of share mischief on the part of the opposition, a deliberate calculated attempt to misinform the public with a view to inciting them against attempt by the government to boost internally generated revenue. Any rational being knows that this bare-faced cheap propaganda is nothing but a build-up to creating chaos in the otherwise peaceful state. However, this is quite understandable in the context of politics of blackmail. But at least, they would have been fair to the people of Edo State by presenting all the sides to the new law instead of painting it all black! Like most laws enacted in normal democratic settings, I must say that this Land Use Charge Law makes provision for some exemptions and gives wide latitude to the aggrieved to seek redress As a public affairs commentator and a critical stakeholder in the Edo project, I owe it a duty to properly educate the public, especially the people of Edo State about the new law, highlighting the areas deliberately black- out or down played by the antagonists.

In the advanced countries of the world, payment of taxes by the citizens are major sources of revenue to the government. In fact, to show the level of seriousness attached to this, these countries have criminalized evasion of taxes either by the citizens or corporate bodies. Unfortunately, in our clime, people and corporate bodies evade taxes with impunity! Edo is one state in Nigeria where the people are never used to paying taxes. Public commentators talk about boosting internally generated revenue, IGR in states so that there will be less dependency on government at the centre. But what is IGR without taxes? Previous governments in Edo State had a leiz affair attitude toward tax collection, preferring to wait on the monthly allocation from the federation account.

 I must say that no responsible government with vision that means well for the people can afford to rely on only one source of revenue. Then, the monthly IGR was as low as #250 million. A government that is focused and resourceful is expected to be courageous enough to put in place a well articulated tax policy to drive the process of booting IGR for infrastructure development that would provide the enabling environment for investment. Unfortunately, past governments lacked the political will power to take from the rich, catering for the poor and the generation yet unborn. Even for the business community, it was unofficial tax holiday at time. But the Oshiomhole government came on board with the share determination to make a difference in terms of infrastructure developments and provision of enabling environment for businesses to thrive in the state. To achieve this, a well thought-out tax policy has to be put in place whereby the people, especially the rich are under obligation to complement government's efforts by way of taxes. With painstaking planning, commitment coupled with high fiscal discipline, the IGR took an unprecedented leap in record time from the meagre #500, 000 to about #1.5billion monthly. 

I must say here that the Land Use Charge is a federal law enacted to boost non-oil revenue in the country. But so far, of the 36 states in the federation, only Lagos and Edo have got the political will and courage to domesticate it. While Lagos has since started its implementation, the executive and the legislative arm in Edo have been meticulously working on it in the last five years, fine-tunning every aspect of the law in such a way that it will not be a burden on the people, especially to mitigate the backlash on the ordinary man. Hence, the exemptions for some critical stakeholders in the polity. For instance, Section 9(1) clearly states the properties so exempted as: Owner occupier of over 60 years old. Family compound. A property owned and occupied by a religious body, approved exclusively for public worship and or used for nonprofit making religious education. Public cemeteries and burial grounds. Public Libraries. All official palaces of recognized traditional rulers in the state. Owner occupied residential property which is 100ft by 100ft maximum in a non- choice area of an urban area and 100ft by 100ft in a choice area in a rural setting. Community property solely for community meetings, activities and events.

Not just that, Section 9 (2) of the same law states that, "The governor may, by notice published in the state government official Gazette grant partial relief for a property that is (a) occupied by a nonprofit making organization and used for games, sports athletics or recreation for the benefit of the general public or (b) Used for charitable or benevolent purpose for the benefit of the general public. Perhaps, in consistent with government policy of taking from the rich to cushion the economic pains of the poor, the new law states emphatically in Section 9 (3) that "No owner occupied property located in an area designated as highbrow choice area and Government Reservation Area, GRA by the Commissioner for Land and Housing shall qualify for exemption, except as specified in section 8(1) of the land use charge." 

Even at that, every property owner has a right of appeal on whatever he/she is charged by the assessor. Section 13 of the law states that "there shall be established a Tax Assessment Review Tribunal constituted........administration and collection of revenue due to the government ......." And Section 15 (1) gives the enabling window to property owners to vent their grievances thus: "A person may appeal to the tribunal if he is aggrieved by a decision that his property is chargeable under this law, (b) The classification of his property, (c) The valuation of his property or (d) the calculation of the amount of land use charge payable. And the tribunal shall make such decision as it deems fit having regard to the evidence before it". Sub section 6 of the same Section 15 states that the "Assessment Appeal Tribunal may confirm, reduce increase or annul the assessed value". Not satisfied with the decision of the Appeal Tribunal, an aggrieved person can still go further on the ladder of justice to seek redress as the same law provides in Section 15(7) "Appeal from a decision of the Tax Assessment Review Tribunal may be made to the High Court of Edo State within 21 days of the decision of Tax Assessment Tribunal". 

For those who have being misinforming the public saying the new tax law amounts to double taxation on property, Section 24 says it's unfounded and dismisses it thus: " On and from the date when Land Use Charges levied on a property in accordance with this law, the provision of the Tenement Rates law and any amendment made pursuant thereto shall cease to apply to that property".

From the foregoing, it is crystal clear that the Land Use Charge is people-friendly and above all, the ultimate beneficiary is the people as the money so collected is expected to be responsibly plough back for developmental purposes. In fact, it's a sure way for regular revenue for the third tired of government. With the full implementation, local government chairmen are expected to come to Benin at the end of every month to meet with the Finance Commissioner to share the proceeds from Land Use Charge, something akin to the monthly Federal Account Allocation Committee, FAAC meeting by the 36 states finance commissioners and chaired by the Finance Minister whereby all accrues to the federation are put on the table for sharing according to the extant laws. Section 18 (3) of the new law provides for this. "The commissioner for Finance shall, not later than ten (10) days after the beginning of each month pay to each local government council in the state, its agreed sharing of the Land Use Charge collection fund". Ultimately, it's going to be a win win deal for the common man in Edo State.