Tuesday, June 23, 2009

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Lagos imposes tax on food consumption, services

LAGOS State Government, on Monday, signed into law a bill to impose tax on food consumption and services at hotels, restaurants and event places.

With this, anybody who buys consumable goods or gets service at hotel and restaurant, pays five per cent of the purchase or the service.

According to the Special Adviser to the Governor on Legislative and Political Powers Bureau, Mr. Abdulkareem Abdullateef, the hotels include, a motel, guest house, apartment for short-time letting, while event centres include; hall, auditorium and open spaces and all other places dedicated as public.

Presenting the bill for signing, Abdullateef said that defaulter would be liable to two years imprisonment or N2 million option of fine or both.

According to him, managements of the hotels and restaurants had been appointed as agents to collect the taxes, while the Lagos Internal Revenue Service would be in charge of the administration of the law.

Abdullateef stated that the law stipulated that every hotel and restaurant must register with the Lagos Internal Revenue Service to effectively implement the law.

He stated that government would begin to operate the law 30 days from when it was signed, calling on all to cooperate with the government.

To address issue of double taxation, the special adviser said that the hotel and other affected restaurants had been exempted from sales tax in the state.

“It’s not going to be business as usual, before any government ministry, agency or local government officials can enter into any contractual relationship with any hotel, restaurant, event centre, there is a condition precedence and it is that such an event centre must produce an evidence of registration with LIRS,” he said.