TO drive the novel policy of Delta Beyond Oil with remarkable success,the Delta State Government is enlarging its revenue mobilization coast for improved financial base. Among the latest of these internal revenue generation initiatives is the compulsory Ground Rent being activated by the State’s Revenue Board. Frank Nwugo, Chairman, State Task Force on Ground Rent spoke recently with journalists on the import and desirability of this new tax regime during its launching.
Excerpt by Egufe Yafugborhi.
WHAT is the import of this Ground Rent?
I am Barrister Frank Nwugo, Chairman, Taskforce on Ground Rent. This issue affects all land owners in Delta State. The 1978 Land Use Act confers ownership of all lands on the Governors of the states. This implies every land in Delta is under the ownership of the State Governor. Therefore, whoever buys land, be it private or government is on lease. We can then say the person is a tenant to the Governor.
Now, if you are a tenant, the only power that makes you sustain your tenancy is continuous payment of your rent in the tenancy agreement.When you don’t pay, the Landlord has the right to revoke the tenancy agreement and take possession of his land. Under the Certificate of Occupancy, C of O, one of the conditions for continuous retention or ownership of land is the payment of Ground Rent.
Every year you are expected to pay a particular amount to the State Government for right to possess that land within 99 years as conferred on you by the C of O.
Purposes of classification
To continue to own land for the period, you are expected to be paying Ground Rent annually. For purpose of this ground rent payment, the 1999 Constitution empowers the State Government (via State House of Assembly) under Sections 4(6) and 44(2) to make laws concerning tax. Based on this, the Delta State House of Assembly in 2009 enacted the Delta State Internal Revenue Consolidated Law of 2009. Section 30 (7) of that Law divided land in Delta State intofour.
We have category A, Land in Asaba, Warri and Effurun. Category B is Ibusa, Ogwashi-Uku, Ughelli, Sapele, Agbor and Abraka. Category C all Local Government Headquarters except Isiokolo and Aboh. Category D covers Aboh, Isiokolo and other towns in Delta State. The purpose of this categorization is premised on the fact that land value differs between urban and rural locations.
For those in Category A, a square meter is Fifty naira (N50) per annum and it further depends on the purpose of the land, whether for residential, commercial, or agriculture. If residential, it is fifty naira. For commercial purpose, it is Hundred Naira (N100), while land for agric purpose attracts lowest twenty naira (N20) per square meter because of the importance government attaches to agriculture to encourage everybody participating in farming.
We were inaugurated recently and today we have launched out. The Statewas divided into six zones comprising Asaba, Warri, Effurun, Ughelli, Sapele and Agbor. We are starting from Asaba Zone. We have Government lands and Private lands. Government land is divided into 5 zones. We are now in Zone A. The Zone commences from Government House through Ilah Road, SSS Road to the end of Head of Service Road.
That is Zone A of Phase I of government land. The essence of Ground Rent (a part of tax) is guaranteed by the constitution which is very clear about payment of tax by all citizens of this country that are adult. Section 24 sub section F of the constitution made it so.
With the launching, you are simply sensitising the target Ground Rent payers. When are you embarking on real enforcement?
Under this platform, the law is the issue. There are two laws regulating this apart from the constitution. One is the Personal Income Tax (Amendment) Act of 2011 and the Delta State Internal Revenue Consolidated Law 2009. By the Act which is a National Assembly creation, Ground Rent is due on the first day of January each year. And by Section 94 of the Personal Income Act, you are given 90 days to comply. For payment, you are required go to the office and tender your land particulars for assessment.
You can’t assess yourself because these are regulated issues. If your facts are correct you now pay. If after ninety days the agency does not hear from you, they issue a demand notice. Next is to raise an assessment based on information available. If after thirty days of serving the demand notice, you do not pay, you will be given another seven days reminder to ensure you pay. If you fail to pay, you will be prosecuted or your land will be revoked or your premises sealed as required by the law.
By acceptance of a C of O, all conditions and terms stipulated in the C of O are binding on the applicant.
Remember, one of the conditions for issuance is the payment of Ground Rent annually. If you fail to pay the ground rent when you ought, Government is at liberty to take necessary measures to recover their land or force you to pay the annual rent and the penalties for non-compliance because the law makes provisions for penalties and even interest at the current CBN rate.
Giving the enlightenment and the fact that this Ground Rent is novel in this state, when exactly is it going to take effect?
Actually, the moment the law takes effect, the implication takes effect. What I mean is that the content of the law in all issues in the law are assumed to have taken effect.
Provisions of the law
So legally the effective day for this ground rent in Delta State is 1st July, 2009 or date of the C of O of the land owners, whichever comes first. But the Governor, being the Chief Executive, relying on the provisions of the law can say let it take effect from 2010, 2011, 2012. But as far as this law is concerned, the effective date is 1st July, 2009.
But we are looking at a situation where majority land holders were have not been informed of this law before now as nobody has enforced it in the state. What is the fate of affected Deltans who have nevergone to declare ground rent since that effective 2009?
We are committed to do that which is required. There are however fundamental questions to clarify. That the law took effect 2009 does not mean all lands in Delta were purchased 2009 or before. Some might have acquired this year or last year. We started operation in earnest July, 2013. We are starting January 2014 after our inauguration because we had to do a lot of things such as informing and educating the public.
If you listen to your radio, the Pointer and other local newspapers, they have been talking about it since July last year. That is part of creating awareness for the people. We believe from last year till now, the enlightenment has gone wide. We have now entered into full implementation of the provision of the law.
The question of when the law takes effect is a function of when you bought that land. Some acquired lands before 2009, but we can’t subject them to payment beyond 2009. Because it is an annual rent we are supposed to be giving annual assessment, we are just giving 2014 assessment.