Consumption tax: Respect court judgment, Lagos tells hotels, restaurants

The Lagos State Government has urged all hotels, restaurants, and events centres operators in the state to respect the decision of the court on the Lagos State Hotel Occupancy and Restaurant (Fiscalisation) Regulations 2017. The state said this in a statement on Friday that a suit challenging the consumption tax law was dismissed by the Federal High Court in Lagos on Thursday.     The Director, Public Affairs, Lagos State Ministry of Justice, Mr Kayode Oyekanmi, who signed the statement, explained that the court dismissed the claim of the plaintiffs that “since the Value Added Tax by Federal Inland Revenue contains provisions relating to the consumption, it had ‘covered the field’ and as such, no state law can impose any similar tax.”  “The judgment stated that Lagos State is the only constitutional and lawful body permitted to assess, impose and collect tax from customers for goods and services consumed in hotels, restaurants and event centres in the state. “The court granted an order of perpetual injunction to restrain the Federal Inland Revenue Service from collecting tax from customers for goods and services consumed in hotels, restaurants and event centres in Lagos State,” Oyekanmi said. The suit, which Oyekanmi spoke of, was filed last year by the Registered Trustees of Hotel Owners and Managers Association of Lagos. The association had in the suit urged the court to strike down paragraphs 4, 5, 6, 7, 8, and 11 of the Lagos consumption tax law. They urged the court to stop the Lagos State Government from installing certain gadgets in hotels and other hospitality centres for the purpose of monitoring their incomes, hence the taxes due to the state. But, according to Lagos State, Justice Rilwan Aikawa dismissed the plaintiff’s suit. “All hotels, restaurants, and events centres managers and operators are hereby enjoined to henceforth comply with the provisions of the Hotel Occupancy and Restaurant Consumption Tax Law and regulations of Lagos State as declared in the judgment of the Federal High Court,” Oyekanmi said.


Source: Punch