Lagos introduces new tax law for hospitality business

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The Lagos State Government has launched a new regulation for fiscalization of the Hotel Occupancy and Restaurant Consumption Tax Law.
The launch comes with a charge on stakeholders in the hospitality industry to embrace the initiative designed to put efficient machinery in place to enhance collection process and ensure compliance.
Speaking at a stakeholders’ meeting held at Lagos House in Alausa, to sensitize owners of hotels, restaurants, bars and event centres in the State on the new regulation, State Governor, Mr. Akinwunmi Ambode said that the automation of the system was introduced to address the high level of under-payment and non-remittance of what is due to government.
Governor Ambode, who was represented by the State’s Deputy Governor, Mrs. Idiat Adebule said it was important for all stakeholders to play their part in scaling up taxation being one of the ways government is able to fund its activities and implement projects and policies for the overall benefit of the people.
“As progressive partners in the development of our dear State, we solicit for your co-operation and support at actualizing this noble initiative.
“All hoteliers, event centre proprietors, restaurant and bar owners must allow the integration of their systems along with the Lagos State Internal Revenue Service (LIRS) server to facilitate the monitoring of consumption tax transactions and remittance of same to the State.
“We must be alive to our responsibilities by paying taxes due in order to ensure the development of our dear State,” Governor said.
Budget performance
The Governor recalled that since his assumption of office, conscious efforts have been made to invest heavily in infrastructure, and that more funds were required to enable government actualize the objective of providing adequate infrastructure and services for residents, a development he said necessitated the need to embrace the fiscalization of the consumption tax regime.
He noted that despite the harsh economy, the 2017 budget of the State performed at 82 per cent with N503.7billion total generated revenue representing 78 per cent performance, while total recurrent expenditure stood at N281.33billion representing 72 per cent and N387.60billion capital expenditure representing 76 per cent performance.
He said though a lot was achieved in that regard last year but that to enable the State Government achieve the target for 2018, the commitment of all residents and business owners was necessary especially in payment of their taxes.
 “Our objective is to rely less on Federal funding and more on self-funding. The automation of processes and leveraging on technology are key to the development of any nation and that is what the fiscalization project has come to address.
“Nigeria has moved from its current position on ease of doing business index from 169 to 145, which is encouraging. This is partly attributable to the reforms and processes put in place by the State,” he added.
Besides, the Governor said the Lagos Internal Revenue Service LIRS has been mandated to work with the Office of the Attorney General to ensure that tax defaulters are brought to book stressing that the electronic invoicing system was part of the reforms to improve on the index and enhance revenue.
Global practice
Earlier, the LIRS Chairman, Mr Ayo Subair said the deployment of the fiscalization system in the hospitality sector was a further demonstration of the resolve of the State Government to continually embrace global best practices in its administration of the State.
He said under the new regime, all the collecting agents would benefit immensely from the high level of transparency the system will bring to their operations in respect of recording of sales as they will have access to all transactions as they occur irrespective of their locations.
Also, Lagos state Commissioner for Finance, Mr. Akinyemi Ashade maintained that despite the improvement in the ease of doing business ranking, Nigeria was still behind in paying taxes ranking, a development he said bought about the new fiscalization regulation.
The Commissioner for Tourism Art and Culture, Mr Steve Ayorinde enjoined stakeholders to key into the initiative as he pledged his commitment to work the players in the industry.