Hotels and Restaurants Consumption (Fiscalisation) Regulations


Monday, March 26, 2018  05.31PM / Oserogho & Associates 

In exercise of the powers conferred on it by Section 9 of the Hotel Occupancy and Restaurant Consumption Law (“Hotels Consumption Tax Law”), the Lagos State Board of Inland Revenue Service (”LIRS”) recently published the Hotel Occupancy and Restaurant Consumption (Fiscalisation) Regulations, 2017 (“Hotels Consumption Fiscalisation Regulations”). 

The primary objective of the Hotels Consumption Fiscalisation Regulations is to enable LIRS have instant, automated, electronic oversight over all consumption transactions in all Hotels, Restaurants and Events Centers in Lagos State. LIRS automated electronic oversight is expected to reduce and ultimately eliminate the evasion of the provisions of the Lagos State Hotels Consumption Tax Law. 

Registration of Electronic Fiscal Devices.
As from the commencement of the Hotels’ Consumption Fiscalisation Regulations, every Owner, Manager or Controller of any Hotel, Restaurant or Event Centre in Lagos State (“the Collecting Agent”) is mandatorily required to install in its business establishment, and subsequently register with LIRS, functioning Electronic Fiscalisation soft and hardware devices (“EFD”) for the purpose of recording all taxable transactions to which the provisions of the Lagos State Hotels Consumption Tax Law applies. An EFD is a specialised Consumption Sales Data Recorder. 

The registration of all EFDs with LIRS is required to be undertaken within seven (7) days of the Collecting Agent receiving the registration notification from LIRS.

Upon registration, all the Collecting Agents’ invoices for goods and services rendered in the Collecting Agent’s establishment, must statutorily be in compliance with the provisions of the Hotels Consumption Fiscalisation Regulations; .i.e. using the EFD and the EFD registration number. The Collecting Agents are also mandatorily required to keep copies of all transaction invoices and receipts issued for any future LIRS audit.

Where the EFD suffers any malfunction, fault, goes for maintenance, is lost or otherwise goes offline; such fault or hindrance must be ratified by the Collecting Agent as soon as possible, with formal notice of such an incident served on LIRS within seven (7) days of any such occurrences.

EFD Data Interchange
All registered EFDs are required to be connected to the LIRS Central Information Electronic System (“CIES”) which System serves as the Data Interchange between the Collecting Agent’s premises and the LIRS offices.

Should the area where the Collecting Agent’s business is sited finds it difficult to establish data connection with the CIES, such Collecting Agent must temporarily use the LIRS provided alternative means of recording the consumption transactions at the Collecting Agent’s establishment.

It is an offence for a Collecting Agent to fail to register or to use a registered EFD; or fails to report any fault or malfunction with a registered EFD, or to notify LIRS of all a Collecting Agent’s points of sale or branches from which the Collecting Agent carries on business.

Sections 10 and 11 of the Hotels Consumption Tax Law of Lagos State imposes various penalties for any of the above mentioned infractions; from interest penalty at the rate of 5% per annum above the prevailing Central Bank of Nigeria minimum rediscount rate on any unremitted consumption tax; in addition to a further 10% penalty on the latter unremitted tax and the interest charged.

Any Director, Manager, Officer, Agent or Employee of a Collecting Agent who fails to comply with any of the provisions of the Lagos State Hotels Consumption Tax Law shall on conviction be liable to suffer 6 months term of imprisonment, or a fine of N2Million, or both the fine and the term of imprisonment.

The obligations on the Collecting Agents to bear the cost of obtaining and maintaining the Electronic Fiscal Devises, in addition to the extra man-hours required to ensure statutory compliance with the Hotels Consumption Tax Law and its Regulations, will only increase the costs of doing business, which additional costs will be passed on to the consumers. 

There are no provisions which protect the data of the Collecting Agents. This is especially as there are no data protection legislations in Nigeria. How will the data obtained through the LIRS data interchange be protected is not disclosed in the legislation and regulation.

Related News
1. Download: Hotel Occupancy and Restaurant Consumption Law 2017 
2. Court Grants Injunction Restraining Lagos State From Enforcing New Consumption Tax Law  

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