Lagos Hotel Occupancy and Restaurant Consumption Tax Law, Constitutional, Court Rules
Justice Rilwanu Aikawa of a Federal High Court sitting in Lagos, has declared that the Lagos State Hotel Occupancy and Restaurant Consumption Tax Law and Regulation, is constitutional, valid and operative.
The Court, in a judgement delivered last Thursday, also invalidated Sections 1, 2, 4, 5 and 12 of the Value Added Tax Act, for being inconsistent with the provisions of the Constitution of the Federal Republic of Nigeria 1999 as amended.
The Registered Trustees of Hotel Owners and Managers had dragged Lagos State Attorney-General & Anor to court, to challenge the legality of the Lagos State Hotel Occupancy and Restaurant Consumption Tax Law and Regulation, in 2018.
The Plaintiff had argued that, since the Value Added Tax (VAT) by Federal Inland Revenue Service (FIRS) contains provisions relating to the consumption, it had ‘covered the field’ and as such, no State law can impose any similar tax.
Delivering judgement in this Suit No. FHC/L/CS/360/18, Justice Aikawa granted an order of perpetual injunction, restraining the FIRS from collecting tax from customers, for goods and services consumed in Hotels, Restaurants and Event Centres in Lagos State.
However, the recent judgement 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 also enjoined all Hotels, Restaurants, and Events Centre Managers and Operators, to henceforth comply with the provisions of the Hotel Occupancy and Restaurant Consumption Tax Law and Regulations of Lagos State.