FIRS Can Collect VAT From Lagos Hotel Owners-Appeal Court

The court of appeal, sitting in Lagos, has ruled that the Federal Inland Revenue Service, Firs, can the statutory mandate to collect Value-Added Tax, VAT, from Lagos hoteliers.

The appellate court gave its ruling on Friday, July 2, following an appeal filed by the FIRS against the Lagos Hotel Owners Association of Nigeria.

In 2018, a Federal High Court, sitting in Lagos, upheld the powers of the state government to charge and collect VAT, a consumption tax payable when goods are purchased and services are rendered, from hotels, restaurants, and event centres within the state. Consequently, it barred FIRS from enforcing VAT provisions on goods and services consumed in hotels, restaurants, and event centres in the Lagos state in 2018.

Displeased with the verdict, FIRS appealed the ruling by heading to the Appeal Court where it obtained a stay of execution pending the outcome of the appeal filed.

Subsequently, the appeal court set aside the ruling of the federal high court, affirming FIRS’ authority to collect VAT from all taxpayers. It also struck out a counter-claim filed by the Lagos government against FIRS.

Meanwhile, there are ongoing legal tussle between FIRS and some state governments over VAT collection. However, no date has been fixed for the hearing of the case at the supreme court.

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