The Lagos State Government wants a law that would punish residents who do not pay tax.
Lagos State residents, who fail to pay their tax in full, at the due date, face a one year jail term based on a bill sent by the State Government to the State Legislature.
The proposed law tagged “A bill for a Law to provide for the Administration and Collection of Revenue due to the State and Local Government Authorities in Lagos State,” for which a public hearing was held, Tuesday, also aims to punish people who obstruct the tax men’s duties with a three year imprisonment.
“It is a very important bill that will touch everybody in Lagos, will make revenue collection more efficient,” the Majority Leader at the Lagos House of Assembly, Ajibaye Adeyeye, said at the public hearing.
The bill, which has 87 sections, also seeks, among other things, to constitute a joint committee of both local and state governments to address the issue of multiple taxation – a common feature in the state.
“Those charged with the tax collection and the local governments would sit together and harmonize revenues,” the House Committee Chairman on Judiciary, Human Rights, and Public Petitions, Sinai Agunbiade, said.
“At the end of the day, no two laws would exist together,” Mr. Agunbiade added.
But the stipulated penalty for tax offenders appeared “too harsh” according to some participants at the hearing.
“The objective of government is comfort to the people, to minister to their socio-economic welfare,” Moshood Fashola, an Economics lecturer at the University of Lagos, said.
“I think that the law in Lagos should not necessarily emulate advanced countries. We should not drive people away with severe harsh laws,” Mr. Fashola added.
The lecturer also stated that the 12 months imprisonment – a rather lengthy jail term in his opinion – should be reserved for chronic offenders.
“We should make Lagos State tax friendly to attract businesses. The objective of tax laws should not be to penalize but to maximize revenue collection,” said Mr. Fashola.
Pay 10% of inherited property
In order to increase its revenue profile, Lagos has also decided to task property owned by the dead.
The inclusion of a 10 per cent charge on Probate Duty – a levy on a deceased resident’s property – would form a second part of the bill, according to the Lagos State Attorney General and Commissioner for Justice, Ade Ipaye.
“The addendum was brought after the initial bill was brought to the Lagos House of Assembly,” Mr. Ipaye said.
The law, when passed implies that people who inherit property located in Lagos would pay 10 per cent of the value of the property to the state government.
“The whole process had been under the administration of the judiciary… The intention of the addendum is to remove that aspect to a new office which is to be established.
“So we propose that it will form a Part B of the Lagos Revenue Law,” the commissioner said.
The bill when passed into law would repeal the Personal Income Law, promulgated in 1993 by the then Federal Military Government.