PRESS RELEASE
August 14, 2008
DPA PROTESTS LAGOS PLAN FOR N275 BILLION BOND,
LUXURY TAX ON HOTELS
Lagos chapter of the Democratic Peoples’ Alliance (DPA) has frowned at
the state government’s proposal to source revenue from two fresh
sources.
Governor Babatunde Fashola recently revealed to banking chiefs that he
planned to raise N275 billion in bonds from the Central Bank of Nigeria
(CBN) for infrastructural development, while the State House of Assembly
tinkered with a new Luxury Tax on hotels.
Describing the move for bonds as prodigal, DPA challenged the Governor and
his predecessor, Asiwaju Bola Ahmed Tinubu, to account for previously
borrowed capitals totaling N55 billion. Of that lump sum, N5 billion was
specifically raised to finance the much-vaunted Eko-Akete Housing Scheme,
which remains stillborn. DPA urged the state government to demonstrate
transparency and accountability by publishing projects financed through
the N55 billion that the Tinubu administration raised from the market.
DPA said: “The Action Congress (AC) government is turning Lagos into a
debtor state, heaping up debts for coming generations of leaders. Any new
loan will further worsen Lagos State’s already bad debt profile which,
as it stands now, cannot be settled in the lifespan of this regime. Whom
do they expect will pay these debts?”
Particularly worrisome to DPA was the fact that the proposed Luxury Tax
would add to prevailing charges that hotels and their customers already
found burdensome, including the Sales Tax, Value Added Tax (VAT) and
Service Charges.
“It really looks like attempting to get more from an already
over-flogged horse,” DPA said, adding, “The government needs to look
elsewhere for revenue because this coming tax will endanger the entire
hospitality industry and arrest the tourism potentials of the state.”
DPA described as self-indicting the Governor’s observation that the
state suffered from a 30-year infrastructural deficit, hindering and
stumping the its socio-economic development.
Fashola was quoted as saying: “It was the same roads that served the
state since 1975 that were still there. It is the same shopping malls.
Tejuosho was built in the 70s and so was Falomo. The number of schools did
not increase. The number of hospitals did not increase, the number of
football fields remained the same.”
DPA said: “The question to ask is: Who is to blame? What did AC leaders
do in the nine years they have been in government? And Fashola was
certainly part of that government.”
However, the party described as equally contradictory the government’s
search for additional funds when it was simultaneously executing a silent
war against businesses.
In the words of the party: “The AC government is staging a comedy of
contradictions. It claims to be looking for money by all means and yet
hindering the operation of businesses through which the money will
flow.”
As far as DPA was concerned, the real issue Lagos had to contend with was
show a commitment to blocking drainpipes in the system and ensuring
transparency and accountability in the state’s fiscal dealings.
“No one has told Lagosians what happened to the N10 billion seized local
government funds and the previous loans they collected at the Nigerian
Stock Exchange. What of the N1.5 billion commission they pay monthly to
Alpha-Beta as commission on internally-generated revenue, even when the
Federal Inland Revenue Service ruled the consultants’ operations as
illegal?” the party said.
DPA also counseled that the state needed to invest in major income-earning
activities like oil, gas, agriculture and especially fisheries, for which
Lagos was uniquely endowed, but which currently accounted for only 5
percent of her revenue.
FELIX OBOAGWINA
Director of Publicity, Lagos DPA
08033327355.