Appeal court sitting in Lagos has ruled in favour of the Federal Inland Revenue Service (FIRS) to commence the collection of value-added tax (VAT) from Lagos hoteliers.
The court gave its ruling on Friday following an appeal filed by the FIRS against the Lagos Hotel Owners Association of Nigeria.
In 2019, a federal high court in Lagos barred the FIRS from enforcing VAT provisions on goods and services consumed in hotels, restaurants, and event centres in Lagos state.
The court upheld the powers of the state government to charge and collect consumption tax from hotels, restaurants, and event centres within the state.
According to premium times, FIRS approached the higher court when it was not satisfied with the verdict of high court and subsequently secured a stay of execution pending the outcome of the appeal filed.
VAT is a consumption tax payable when goods are purchased and services are rendered.
In its ruling, the appeal court set aside the federal high court’s judgement, affirming FIRS’ authority to collect VAT from all taxpayers.