As the debate over the recently revised Lagos State Land Use Charges (LUC) rages on, a Price Waterhouse Coopers (PWC) report has compared Lagos state to the fictional Wakanda, setting for the wildly popular Black Panther film.

According to an excerpt of the report, the consulting suggested that in the absence of Vibranium, Lagos State needed a tax like LUC to grow its economy to look like that of the fictional Wakanda.

Vibranium was a fictional natural resource used in the movie as a source of wealth and knowledge for Wakanda.

for a city that has a huge infrastructure deficit estimated at over US$50b, it is not difficult to see the need for a review of the LUC. In the absence of ‘vibranium’, Lagos has to resort to taxes to achieve an economy similar to the fictional Wakanda.

By inference, Lagos State requires a tax like the Land Use Charge to help plug its infrastructural deficits.

A better way to charge

In the report, PWC also advises that the Lagos State government would be better off having one comprehensive charge, rather than several charges such as waste disposal and business premises levy.

Simplify the computation

PWC also suggested that the state simplifies the computation so that the average property owner can compute it without any external assistance. This would enable property owners to conduct self-assessment and reduce controversy surrounding the charges.

Impact on property rentals

The new LUC could lead to an increase in rent fees depending on the type of property and location. Individuals have the option to moving to a cheaper area, if their current rent becomes expensive.

Introduction of LUC on vacant properties in the new law (which was not there previously) would encourage the use of the land since nobody would want to pay LUC without getting any commercial benefit on the land. This could lead to more supply of property for rentals and a tenant’s market.

The introduction of the new charges has been riddled with controversy due to the huge hike in the fees, in some cases by as much as 500% and the inclusion of a private company Alpha Beta Consult to monitor the payment of the charge. The Lagos State House of Assembly has however described the inclusion as an error, which it will correct.

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The Lagos State government has also indicated its willingness to dialogue on the act’s grey areas. The duration for a 15% discount on the revised charges has been extended to April this year.

Onome Ohwovoriole has a degree in Economics and Statistics from the University of Benin and prior to joining Nairametrics in December 2016 as Lead Analyst had stints in Publishing, Automobile Services, Entertainment and Leadership Training. He covers companies in the Nigerian corporate space, especially those listed on the Nigerian Stock Exchange (NSE). He also has a keen interest in new frontiers like Cryptocurrencies and Fintech. In his spare time, he loves to read books on finance, fiction as well as keep up with happenings in the world of international diplomacy. You can contact him via onome.ohwovoriole@nairametrics.com

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