Property Tax Is Threatening Survival of Nigerian Industries

Business News

By Franklin Ocheneyi

 IT happened almost ten years ago, and it might soon happen again- the exodus of Nigerian industries to neighboring countries.

Recall how Dunlop Nigeria Plc, Michelin Tyres, and other manufacturing concerns closed down their operations and relocated to Ghana where it’s believed that the business environment is friendlier.

The cries of these companies with thousands of workforce, over harsh operating business climate, especially double-taxes from the federal, state and local government, and which went unheeded, forced these firms to bade by- bye to doing business in Nigeria.

Also, recall the words of the then Chairman of Dunlop Nigeria, Mr. Jabez Dayo Lawuyi, to the shareholders “The conclusion of your board is that as things stand now, it will be impossible to resume full manufacturing process and it will not be appropriate in the circumstances to continue to expose your investment and the company’s assets to the current business structure. It is therefore with utmost regret that your company will be following the steps of Michelin, and others by ceasing manufacturing operations in our factory if the situation as we have it now is not redressed urgently.”

We learned that since the law was passed, many property owners had developed hypertension because the assessed value of a property has also been reviewed upwardly by over 500 percent.”

Nearly 10 years after, history is about to repeat itself again, as the drive for more tax revenues is once again threatening the business community, especially those operating in Lagos, to close shop, or if they must choose to remain in business, comply with governments tax demands.

“Government is toying with people’s lives and survival of businesses. Things are pretty hard, and perhaps because you are on the other side, you do not know.

“Businesses are barely surviving. The income of Nigerians in the past five years, salaries and rental income alike, has been bastardised by the inflation rate.

That was how Mr. Timothy Olawale, representative of the Organised Private Sector (OPS) in Nigeria, reacted to the new Land Use Charge Law, 2018, by Lagos State Government.

Lagos State Government recently repealed its 2001 Land Use Charge Law and replaced it with a new Land Use Charge Law, 2018. The State House of Assembly had passed the bill on Jan. 29, while the Governor signed it into law on February 8.

Speaking during a stakeholders’ forum on the new law organised by Lagos Chamber of Commerce and Industry (LCCI), the OPS said Lagos lawmakers ignored public outcry against it. The OPS comprises of Manufacturers Association of Nigeria (MAN), Nigeria Employers’ Consultative Association (NECA), Nigerian Association of Chambers of Commerce, Industry, Mines and Agriculture (NACCIMA).

Others are National Association of Small and Medium Scale Enterprises (NASME) and National Association of Small Scale Industries (NASSI).

According to Mr. Olawale, the OPS were given less than five minutes to express their concerns during the public hearing on the review of the law.

“The hearing was like a premeditated arrangement; the lawmakers failed to take into account public outcry against the review given the effect it would have on property owners, going through depreciation and devaluation of naira.

“We wrote a letter as a follow up to the public hearing stating our position, still it was ignored,” he said.

However, Mr. Akinyemi Ashade, Lagos State Commissioner for Finance, said that the law would entrench a regime of self-assessment that allows property owners to make their own calculation and know their rate with the help of property valuation experts.

Ashade said that various reliefs had been made available to payers, including a general 40 percent relief for all property liable to LUC payment.

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