Court Restrains Lagos State From Enforcing 5% Consumption Tax Law

Lagos State Governor Akinwunmi Ambode

A Federal High Court in Lagos has restrained the Lagos State Government from enforcing the provisions of its new Hotel Occupancy and Restaurant (Fiscalisation) Regulations 2017.

The law introduced a five percent consumption tax in addition to the already existing Federal Government legislated five percent Value Added Tax on every purchase or service rendered by service providers not limited to hotels, restaurants, fast food outlets, event centers, bars and nightclubs in the state.

But in a ruling delivered on March 21, 2018, Justice Rilwan Aikawa restrained the state from further enforcing the law.

The judge said the law would remain suspended until the final determination of a suit filed against its implementation by the Registered Trustees of Hotel Owners and Managers Association of Lagos.

The judge also temporarily struck down the Hotel Occupancy and Restaurant Consumption Law Cap H8, Laws of Lagos State 2015.

He particularly restrained 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.

Justice Rilwan Aikawa stopped the state and its agents from visiting the plaintiffs’ hotels “for the purpose of installing fiscal electronic device and any other purposes whatsoever in furtherance of the law and the regulations.”

He made the interim order following an ex parte application taken before him by the association of hotel owners in Lagos through their lawyer, Mr. Olasupo Shasore (SAN).

Shasore, who is a former Lagos State Attorney General and 2015 Lagos APC Gubernatorial Aspirant, 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.

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

It would be recalled that the Lagos State Hotel Occupancy, Restaurants and Events Centres Consumption Tax Law, 2009 was passed by the Administration of Babatunde Fashola SAN during the tenure of Olasupo Shasore SAN as the Attorney general of Lagos State while the Lagos State House of Assembly November 2017 passed a regulation on Hotel Occupancy and Restaurant Consumption (Fiscalization)



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