Monday, October 23,
2017 1:52PM / Legal Alert / Oserogho & Associates
economic potential that the Tourism Industry holds, both internally and
externally, especially in diversifying the economy away from a mono crude oil
export economy, continues to be magnified as the economy slowly recovers from a
the recent attempts to harness the opportunities in the Tourism Industry is the
second reading of the Nigerian Tourism Development Corporation (Repeal & Re-enactment)
Bill, 2017 at the National Assembly. This Bill has elicited a lot of concern
from various stakeholders in the Tourism and Hospitality Industry such that an
appraisal of some of its provisions will make for a better informed opinion.
Tourism Development Bill
Nigerian Tourism Development Corporation Bill, 2017 (“NTDC Bill”) seeks to
repeal the Nigerian Tourism Development Corporation Act (“NTDC Act”), and in
its place establish the Nigerian Tourism Corporation (“NTC”) to among other
things develop, promote, regulate, accredit, grade, classify and supervise
every aspect of the Tourism Industry in Nigeria.
NTC Bill further contemplates the establishment of a Tour Operating Company
(“TOC”), with offices in each of the six (6) geo-political zones. TOC is to
establish tour services within and outside of Nigeria.
of NTC’s funding options includes the levying of a Tourism Visa Fee on all
in-bound International Travellers to Nigeria; a Tourism Departure Levy on all
out-bound Travellers; a Tourism Development Contribution Levy of 1% per Hotel
room rate or such flat fee as maybe fixed by NTC; and a Corporate Tourism
Development Levy to be charged on the revenue of Banks, Telecommunications and
other corporate entities.
Constitution, Case Law and Tourism
2010, the Federal Government of Nigeria (“FGN”) challenged the constitutionality
of the following statues enacted by the Lagos State House of Assembly:- (i) The
Hotel Licensing Law; (ii) The Hotel Licensing (Amendment) Law; and (iii) The
Hotel Occupancy and Restaurant Consumer Law. FGN contended that these
legislations usurped and undermined the provisions of Section 4(2)(d) of the
Nigerian Tourism Development Act.
Lagos State Government, in response to FGN’s above legal challenge, contended
that under the 1999 Constitution of the Federal Republic of Nigeria, Hospitality
and Tourism Enterprises, not being among the items in the Exclusive and
Concurrent Legislative Lists, were residual matters in which the States’ Houses
of Assembly can legislate. To the extent that some of the provisions of the
NTDC Act are inconsistent with the provisions of the 1999 Constitutional
regarding Tourism and Hospitality regulation, such inconsistency should be held
by the Supreme Court to be null and void, and of no effect whatsoever.
Supreme Court dismissed FGN’s claims in this suit, and unanimously upheld the
above submissions of the Government of Lagos State. This is especially as
Nigeria operates a Federal System of Government, with each State in the
Nigerian Federation enjoying its separateness and independence from the Federal
Supreme Court further held that by virtue of the provisions of Section 4(1-3)
and item 60(d) of Part 1 of the Second Schedule of the 1999 Constitution, FGN
can only exercise jurisdiction over Tourist Traffic; and Tourist Traffic the
Supreme Court described to include only the ingress and egress of International
Tourists from other countries, via visa controls.
the provisions of the above referred 1999 Constitution, which provisions were
followed by the Supreme Court in the above case of Attorney General of the
Federation v. Attorney General of Lagos State (2013) 7SC (Pt.1) 10 @ 88 – 90,
are amended or repealed, the provisions in the NTC Bill regarding the
regulation of the Tourism Industry, will if passed into law, again be held to
be invalid, null and void once such provisions are challenged in a Court of
most of the financial provisions in the NTC Bill are inimical to the Tourism
and Hospitality Industry which is already burdened by multiple and double
taxes, a recessed economy with dilapidated infrastructure nationally, an
unskilled 21st century compliant manpower pool, aggressive foreign tourism
competition for other destinations, etc. Examples of such injurious provisions
include a Tourist Visa Fee, a Tourist Development Levy, a 1% per room hotel
Tourism Development Levy and a Corporate Tourism Development Levy.
Federal Government will do well to concentrate on more essential National
issues, than on Tourism and Hospitality Regulation which are better managed by
States and Local Governments.
the above cited Supreme Court decision centered solely on who has the
Constitutional authority to legislate on the Regulation, Registration,
Classification and Grading of Hospitality and Tourism Businesses in Nigeria.
Arguments and a final decision on whether or not the Lagos State Hotel
Occupancy and Restaurant Consumption Law can be administered concomitantly or
at the same time with the Value Added Tax Act in Lagos State were not made in
continued application of the Value Added Tax Act and the Hotel Occupancy and
Restaurant Consumption Law on the Hospitality Industry needs to be determined
by a superior Court of Record as the application of both taxes on the same tax
base increases the cost of consumption and jeopardises the growth of the
preferred option will be for the 1999 Constitution to be amended and the Value
Added Tax Act to be repealed with States and Local Governments allowed to
administer any form of consumption tax in their jurisdiction.
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