Court Bars LASG From Implementing Hotel Tax Law

Court Bars LASG From Implementing Hotel Tax Law

A Federal High Court in Lagos on Friday barred Lagos State Government from enforcing the provisions of its new Hotel Occupancy and Restaurant (Fiscalisation) Regulations 2017 pending the hearing and determination of a suit filed by the Registered Trustees of Hotel Owners and Managers Association of Lagos.

Justice Rilwan Aikawa, who gave the interim order after entertaining an ex parte application brought before him by the hotel owner, specifically temporarily restrained the state from enforcing the Hotel Occupancy and Restaurant Consumption Law Cap H8, Laws of Lagos State 2015.

Joined as defendants in the suit, marked FHC/L/CS/360/2018, are the Attorney General of Lagos State and the Federal Inland Revenue Service.

The judge also stopped the state from enforcing or implementing paragraphs 4, 5, 6, 7, 8, and 11 of the Lagos State Hotel Occupancy and Restaurant (Fiscalisation) Regulations 2017.

He further barred the state and its agents from visiting the plaintiff’s hotels “for the purpose of installing fiscal electronic device and any other purposes whatsoever in furtherance of the law and the regulations.”

The disputed law introduced a five per cent consumption tax in addition to a five per cent Value Added Tax on every purchase or service rendered by hotels, restaurants, fast food outlets,  event centres, bars and night clubs.

The association of hotel owners in Lagos through their lawyer, Mr. Olasupo Shasore (SAN) had prayed the court to stop the state and its agents from visiting his clients, “between March 1 and March 10, 2018 or any other period before or thereafter” pending the hearing and determination of his clients’ motion on notice dated March 7, 2018.

Shasore, a former Attorney General of the state, also asked the court to stop the government from ordering installation of Electronic Fiscal Device (EFD) in their systems.

He argued that it violates their rights to privacy and could compromise the confidential data of lodgers and other customers while making their databank vulnerable to hackers and other external attacks.

Justice Aikawa, after granting the interim restraining orders, adjourned till April 17, 2018 to hear the plaintiffs’ motion on notice.

The Regulation requires all Collecting agents, persons who own, manage or control any business or supplies any goods or services which is chargeable under the Law (hotels, event centres, restaurants, lounges, clubs and bars) to use an EFD to record all taxable transactions.

An EFD is an electronic device for registering and calculating transactions at points of sale. EFDs record and transmit to LIRS real time taxable transactions for the purposes of administering Consumption Tax.

From the commencement of the Regulations, all agents are required to, or cause to be installed fiscalisation hardware and software in all their business premises and exercise due care to ensure the proper functioning of the device.

Agents are to register EFDs within seven days of receipt of notification of the Regulation from the LIRS and display their registration number prominently on the EFD.

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