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Lagos shifts attention to consumption tax, hotels


THE Lagos State Government is to tighten the noose around indiscriminate establishment of hotels in the state. Also, those who use hotels, restaurants, event centres and the likes will soon be required to pay consumption charges on facilities and purchases.

Infact, many unviable leisure centres will have to close down as stiff registration and maintenance fees will now be charged.

Although Vanguard could not ascertain what the new fees will be at the weekend, but  reliable sources hinted that the Commissioner for Tourism and Intergovernmental Relations, Mr Disu Holloway, will soon present the new tariff to the state Executive Council towards the generation of an executive bill for consideration by the State House of Assembly.

*Gov Fashola
*Gov Fashola

The new stance resulted from a ruling by panel of the Supreme Court of Nigeria, led by Justice Suleiman Galadima, which at the weekend unanimously declared that it was only state Houses of Assembly that could make laws on tourism or   licensing and grading of hotels and other hospitality establishments, such as restaurants and fast food outlets.

The court said the 1999 Constitution only empowered the National Assembly to regulate tourists traffic, “a term which does not include hotels grading and licencing“.

It validated both the Hotel Licencing Law of Lagos State (as amended), and Hotel Occupancy and Consumption Law, declaring as null and void the conflicting sections of the Nigerian Tourism Development Commission, NTDC, Act.

Meantime, the Lagos State Government has commended the Supreme Court judgment which stripped the NTDC of powers to regulate hotel operations in the state.

The verdict has been commended by Mr Disu Holloway.

He said the verdict vindicated the consistent position of the state government that the grading and licensing of hotels were exclusive responsibilities of the state, adding that it was a “victory for true federalism“.

“This is a landmark judgment and we commend the Supreme Court for upholding the tenets of true federalism. It is our expectation that this judgment will eradicate multiplicity of taxation and regulation, thereby enabling the states to take charge and plan for the hospitality industry in their respective territories,’’ he said

The state government and the Federal Government, through the NTDC, had been embroiled in controversy over the question of authority to license and grade hotel establishments.

The situation resulted in both parties setting up regulation and registration structures for the state‘s hospitality industry.

Lagos Consumption Tax
Hotel Occupancy and Restaurant Consumption Law is a law enacted by the Lagos State House of Assembly which imposes tax on goods and services consumed in Hotels, Facility or Event Centers within the territory of Lagos State.

It imposes on any person, Corporate or otherwise who pays for the use or possession of any hotel, facility or event centre; or purchases of consumable goods or service in any restaurant whether or not located within a hotel in Lagos State. The rate of tax imposed by the law is five percent of the total bill issued to the customer excluding Value Added Tax and Service Charge.


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