Should Building Plan Approval process be regulatory or revenue generating?

“Kindly refer to the above subject matter on your Building Plan application for a Development Permit which is under processing in this office. Kindly be informed that the Lagos State Internal Revenue Service (LIRS) has adjudged that your income tax status is not up to date. You are therefore requested to make additional payment of …….”

If you put in an application for Building Plan approval in Lagos State, it is an invitation for the State to review your tax affairs. So virtually all parties who put in an application, get letters with content similar to the opening lines of this article. The result is that the application suffers delays as tax issues are sorted out and no building plan application can be concluded in the 30 day period, the State Government has indicated as the maximum time for such applications.

When the CASTLES Lifestyle correspondent asked the Commissioner of Physical Planning and Urban Development, TPL ‘Toyin Ayinde, at a recent FIABCI seminar if Building Plan applications should be regulatory or revenue generating, the Commissioner’s answer was brief and to the point: “both”. TPL Victor Emdin, at the same event, however argued that by its revenue generating and administrative duties, the Town Planning authorities are compelled to delay the approval process.  He argues that the Building Plan application review is a technical process but when the applicants have to sort out tax matters and proof of title, delay is inevitable.

A commentator sitting beside our correspondent grumbled beneath his breath that his own grouse was that the tax authorities seized on the size of the project to come up with a ‘Best of judgement’ assessment of what the project owner’s tax should be. This is assessed on current values despite the owner buying the land several years ago when the prices were low and speculatively putting forward a building plan in the hope that sometime in the future, he would have some funds to start the project. He also recollected another instance where Government levies Infrastructure Development Charge (IDC)  but does not provide any infrastructure.

While TPL Ayinde indicated that the Government was reviewing IDC, the consensus around the table where our correspondent sat was that until the Government separates the revenue generation duties from the technical assignment of vetting the applications, building plan applications will always be delayed.

Original copy found here: Should Building Plan Approval process be regulatory or revenue generating?