Kano govt. introduces 5% consumption tax

Kano state government has introduced five per cent (5%) consumption tax on goods and services to improve her internal revenue generation profile.

The law which was gazetted last week, Daily Trust learnt would be applied on hotel services, event centres, supermarkets and shopping malls as well as other retail outlets across the state.

Speaking yesterday during the stakeholders sensitisation workshop on the new tax regime in Kano, the Director legal services and enforcement, Kano State Internal Revenue Service, Adamu Mohammed, said the business operators would serve as collection agents on behalf of the service.

He said the end users of goods and services should be charged extra 5% over the original price of any services or product they purchase which would be remitted on monthly bases to state revenue services.

He said the implementation of the law will commence in July this year, urging the business operators for compliance.

Clarifying the confusion between the new tax regime with the extant Value Added Tax system, Mohammed said ‘’consumption tax is a 5% deduction payable by consumers of goods and services including hotels, restaurants, entertainment centres, shopping malls, event centres and the like. Value Added Tax on the other hand is 5% payable by the business owner to the federal government’’.

Answering question on how the tax law seeks to protect consumers from exploitation by the business operators he said ‘’I don’t think government anywhere in Nigeria regulates prices, we don’t have such now, so if it is said this is N10, if you are desperate you can buy, but the protection can be in quality and standard.

Some of the stakeholders comprising hotel operators, supermarket owners and other business operators expressed concern over the new tax regime saying it is disincentive to businesses.