Hotels, restaurants and event centres in Lagos to pay VAT to FIRS, court says

  • Hotels, restaurants and event centres will henceforth pay Value Added Tax to the Federal Inland Revenue Service
  • This is following a court ruling which empowers the federal tax agency to take taxes from hotels, event centres and restaurants operating in Lagos
  • Lagos and other states in Nigeria have been on a face-off over VAT in the last couple of months with most states insisting FIRS cannot charge VAT from their states

The appeal court sitting in Lagos has ruled that the Federal Inland Revenue Service (FIR) can collect Value Added Tax (VAT) from hotels in Lagos.

The verdict of the court was given on Friday, July 1, 2022, following an appeal by the tax body against Lagos State Hotel Owners Association of Nigeria.

Hotels, Lagos State, FIRS, Event Centres, Restauramt
Hotels, restaurants and event centres to start charging VAT
Credit: Marko Geber
Source: Getty Images

Court empowers state government and FIRS

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Value Added Tax is a consumption tax paid when goods are bought and services are given.

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TheCable reports that a federal high court in Lagos has stopped FIRS from implementing VAT provisions on goods and services consumed in Lagos State.

The court supported the powers of the state government to charge and collect consumption tax from hotels, restaurants and event centres in the state.

The FIRS had gone to the court of appeal and thereafter obtained a stay of execution pending the outcome of the appeal filed.

VAT tussle rages in states

In the ruling, the court set aside the federal high court’s judgement, saying that the FIRS has the power to collect VAT from all taxpayers.

The court also knocked out a counter-claim filed by the Lagos State government against FIRS.

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A legal battle between FIRS and some states in Nigeria over VAT collection has been raging for sometime with states saying that FIRS lacks powers to takes from their states.

NNPC, NLPGA, MTN top list as FIRS reveals top-performing Ttaxpayers in Nigeria, Dangote missing from Top 10

Legit.ng reported that the Federal Inland Revenue Service, FIRS has published its Top tax-compliant companies in 2021.

The list revealed on Twitter showed that of the top ten companies listed, 8 are in Nigeria’s Oil and gas space and 2 in Nigeria’s telecoms space.

The disclosure was made in a report FIRS titled Accolades For Our Tax-Complaint Companies In 2021.

Source: Legit.ng

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