Government of Nigeria’s south west Lagos State on Monday warned hoteliers that failure to pay the 5 per cent consumption tax charged its consumers into the coffers of the state would attract a 2 million naira fine.
This was contained in a Bill to improve goods and services consumed in hotels an d public places signed into law by Governor Babatunde Fashola.
The new law, effective Monday, warned that offenders would also be liable to two years imprisonment or both.
The law covers event centres, restaurants, auditoriums, motels and other public places or outlets where guests are lodged or where consumers buy consumable good s in the state.
Fashola, however, clarified that local eating joints, popularly called “bukateri as” and “mama puts” are exempted from such fines.
The governor also explained that those who would be paying the 5 per cent of the total charged them as consumption taxes would be exempted from the sales tax in
“With this law passed, the issue of double taxation has been put to rest,” he s aid.
Fashola explained that charging consumption taxes was in line with what was obta inable all over the world as it was a way of asking the operators to contribute t o the commonwealth pool.
“We are only asking them to give just five per cent of their charges to be used for refuse collection, provision of security, adequate roads and other faciliti e s within and around their facilities,’’ he said
He directed his Special Adviser on Taxation and Revenue, Mr. Adeola Ipaye, to o rganise a stakeholders’ forum with operators in the hospitality industry on the n ew law for them to understand it and be able to interpret it appropriately.
Speaking earlier, Mr. Abdullateef Abdulhakeem, the Special Adviser to the Govern or on Legislative and Political Powers Bureau, said the state government had app o inted the operators of the public places to serve as collecting agents.
“We are interested in compliance with the law but anybody found guilty will be liable to two years imprisonment or a fine of N2 million or both,’’ he said.
He, however, explained that the consumption tax was outside the Value Added Tax (VAT) that was already in vogue throughout the country.
Abdulhakeem implored all operators of such hospitality outlets to register them with the Lagos Internal Revenue Service (LIRS) within 30 days from Monday.
“Such centres must produce an evidence of such registration with the LIRS befo re they can enter into any contractual agreement with the state government,’’ he
According to him, the law will bring relief, comfort development and tourist att ractions into the state as well as facilitate employment opportunities.