Court stops FIRS from collecting VAT from Lagos hotels, restaurants
A Federal High Court sitting in Lagos has granted an order of perpetual injunction to restrain the Federal Inland Revenue Service (FIRS) from collecting Value Added Tax (VAT) from customers for goods and services consumed in hotels, restaurants and Event Centres in Lagos State.
The court also declared the Lagos State Hotel Occupancy and Restaurant Consumption Tax Law and Regulation as constitutional, valid and operative.
“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 ruled.
The judgment was delivered in Suit No. FHC/L/CS/360/18 between the Registered Trustees of Hotel Owners and Managers Association vs. the Attorney General of Lagos State & Anor by Justice Rilwanu Aikawa on Thursday.
The judgment stated that since the Value Added Tax (VAT) by Federal Inland Revenue Service contains provisions relating to the consumption, it had ‘covered the field’ and as such, no State law can impose any similar tax.
The Court, therefore, invalidate 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 challenged the legality of the Lagos State Hotel Occupancy and Restaurant Consumption Tax Law and Regulation Law in 2018.
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Bravo!
What have they done with taxes collected over the years?