Ambode is seriously digging a hole for himself with new taxes

Lagos Governor Akinwunmi Ambode is facing a reputation crisis in Lagos over outrageous and unreasonable taxes--only a couple of months before a major re-election battle. And the feedback from the streets should worry him and the APC.

Residents of Lagos have been railing against the infamous Land Use Charge which is essentially a property tax. The Land Use Charge Act of 2018 repeals a similar law of 2001.

The 2018 Land Use Charge is a 400 percent tax increase on landed property in the nation’s commercial capital.

Lagosians will also be paying all manner of taxes on cars, boreholes and water treatment plants. There is also the increase on vehicle toll fares at the Ikoyi-Victoria Island-Lekki axis of the State.

Taken together, Lagos is beginning to look like a State that wants to milk its residents dry in order to bolster its internally generated revenue. All of this in a country where disposable income remains at abysmal levels.

Opacity

There is nothing wrong with reviewing old tax rates and imposing new ones. It is true that people would rather not pay taxes if the choice was theirs to make. Besides, reviewing the Land Use Charge is long overdue given that the rates have remained the same since 2001.

My grouse is what Lagos plans to do with new taxes given the opacity with which Governor Ambode and his coterie of godfathers have been conducting the affairs of the State.

I reside in a Lagos neighborhood where we generate our own water and power, provide our own security and make our roads motorable. Our cars have given way no thanks to deplorable road surfaces within and outside my neighborhood. Stench from overflowing refuse bins envelope the entire city all day. Everywhere you turn in Lagos, infrastructure is crumbling and the decay is palpable.

Yes, Ambode intends to raise taxes to fix the problems I have enumerated above, did I hear you say? But there’s nothing in Lagos to show that taxes that have been paid by citizens up to this point have been put to judicious use. Why should we pay more in taxes when we haven’t been told what our old taxes have been used for? Why should we pay asphyxiating new charges when Ambode has been running the State like a private estate since 2015?

Why should anyone be happy to pay new taxes in an economy that is stifling the private sector, running many businesses aground and impoverishing millions daily? What exactly does government do for the people as part of its social contract?

Fair share

The opposition to Ambode’s Land Use Charge has nothing to do with people blatantly refusing to pay taxes that will improve infrastructure and living conditions and wean the 5th largest economy in Africa off Nigeria’s dwindling oil revenue cookie jar.

After all, the fact that Lagos has seen an upsurge in internally generated revenue from N600 million in 1999, to N22 billion in 2015, and N341 billion in 2017 tells you that people have indeed been paying their taxes. The problem is that there hasn’t been commensurate infrastructure development on the ground to justify new taxes.

Yes, we need to widen our tax net and encourage more people to pay their fair share of taxes. Tax compliance is a big issue everywhere and Lagos is no exception. But there are also the unresolved issues of multiple taxation and fraudulent tax officials roaming the nooks and crannies of the city.

Ambode’s engagement with stakeholders and the media has been pretty awful as well since 2015. The man has been carrying on as though he doesn’t need to explain anything to anyone—as though everything he does will enjoy the people’s buy-in just because it is Lagos we are talking about here.

In a bid to generate more revenue, the people and the media haven’t been carried along. One would like to know if there was a press briefing, sensitisation campaign or meetings with constituents before this new round of taxes were imposed on the people.

A town hall meeting was hurriedly put together by the Lagos State government last week only because voices opposed to the new taxes were growing louder and truculent.

A Twitter user recently accused the Lagos state Governor of not being sincere about the property tax.

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Lagosians must be made to feel that they are paying their fair share of taxes for the development of their city and that they are partners in the city’s development. Thus far, they haven’t felt that way because no one appears to be telling them the truth. And in an election season, that perception is bad for brand Ambode and the APC.

Itesiwaju Eko!