Lagos Govt. shuts down hotels and events centres over tax evasion

The Lagos State Internal Revenue Service, LIRS has shut down 20 hotels, restaurants and event centres because of their failure to remit taxes.



The Director of Legal Services of the LIRS, Seyi Alade, made the disclosure in an interview with the News Agency of Nigeria (NAN) on the sidelines of a tax law enforcement exercise, conducted in Lagos on Tuesday.

Alade said the affected firms owed the State Government a total of N295.49 million, adding that the state had started full enforcement of all aspects of the tax laws on tax defaulters. He named some of the shut facilities as Bienvenue suite Ltd., Ajaxbel Hotel, Mayor Hotel, Lafun suites, Darahamson Guest Palace, Mozarella Hotels, among others.

According to him, sealing of hotels and other facilities will be eradicated, due to the coming into operation of the Hotel Occupancy and Restaurant Consumption (Fiscalisation) Regulation, 2017. According to him, the new regulations had made it mandatory for all hotels, restaurants, event centres and other entities liable to consumption taxes, to allow integration of the Electronic Revenue Assurance Systems (ERAS).

“ERAS is a software application or device that issues invoices and receipts to consumers, bearing a unique QR code, detailing the items and/or services ordered and in an embedded automation of consumption tax remittance in real time.

“It is a measure that will allow the LIRS to have effective oversight of all sales transactions undertaken through these entities.

“The system offers transparency to the entire management and operational system of the entities and it is also of immense benefit to the tax collecting agents.”

According to Alade, this is not a new law, but a compliance machinery with the existing Hotel Occupancy and Restaurant Consumption Law of Lagos State, towards aligning with global best practice in the use of technology and automated solutions.

He noted that the system was long in operation in countries like Kenya, Rwanda, among others, adding that Lagos State could adopt it to enhance the effectiveness of its taxation and revenue generation system.

He warned that failure to be integrated into the ERAS platform was an offence punishable by fines and jail terms upon conviction by the court.

He appealed to business entities liable to consumption taxes to endeavour to be integrated into the ERAS platform and ensure prompt remittance of taxes to avoid disruptions to their businesses.

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