FIRS to Collect VAT From Hotels, Event Centres, Restaurants in Lagos, Court Rules
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 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, restaurants and event centres to start charging VAT
Value Added Tax is a consumption tax paid when goods are bought and services are given. according to a report 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.
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.