The Lagos State Internal Revenue Service (LIRS) has introduced a new payment system that uses the electronic fiscal device (EFD) for hotels, restaurants, nightclubs and event centres and all stakeholders in the hospitality and tourism sector.
The new payment mode was officially launched in Lagos at a meeting between LIRS and tourism stakeholders with the theme “Fiscalisation of the Hotel Occupancy and Restaurant Consumption Tax Law,” where the new Electronic Revenue Assurance (ERA) system was also unveiled. In his speech at the official launch, Lagos State governor, Mr. Akinwunmi Ambode, represented by the Deputy Governor, Mrs. Idiat Adebule, restated his commitment to making Lagos one of the largest economies and smartest cities in the world, and appealed to business owners to key into the new system by promptly paying their consumption taxes through the new technology.
“Funds are required to enable the government to actualise its objective of the provision of adequate infrastructure and services for the residents of a mega city. Prompt payment of taxes is the way in which government is able to finance its activities,” he said.
The ERA system is a software application/device that issues invoices and receipts to consumers bearing a unique QR code. The receipt also contains details of the items and/or services ordered and an embedded automation of consumption tax remittance in real time.
The executive chairman of the LIRS, Mr. Ayodele Subair, said, “this tax remittance system is aimed at facilitating ease of convenience with the Hotel Occupancy and Restaurant Consumption (HORC) law of Lagos State. It will bring to their operations, with respect to the recording of sales as they would have access to all transactions as they occur irrespective of their location.”
“It, therefore, presents a win-win situation for stakeholders, taxpayers, collecting agents and the revenue administrators. There’s going to be better transparency and accountability of the administration of the consumption tax law itself as well as reconciliation.”
Commissioner for finance, Lagos State, Mr. Akinyemi Ashade, affirmed that the hotel occupancy and restaurant consumption tax law was not new but an amendment of an existing law. He said that the new system was supposed to enhance “the ease of doing business. It will enhance the ease of paying the consumption tax. The era of people collecting money and not reporting it will be gone.”
Also present at the meeting was Mr. Olusegun Banjo, commissioner for economic planning and budget, who shed more light on the reason for the new regulation.
He said, “This regulation is going to give us a balance in terms of planning; the fiscal process is going to be known to all and seamless. We plan well on capital holdings in Lagos but we find it absolutely difficult to plan our revenue due to the aspect of the citizenry and in some cases we have an outright evasion of taxes.
“We have observed the lifestyle and spending habit of Lagosians and we have seen some inconsistencies. Where GDP keeps growing, the ratio of tax to GDP keeps dropping and it is very abnormal. This regulation is seeking to remove this abnormality.”
Reacting to this new device, president of the Association of Fast Food Confectioners of Nigeria, Mrs. Kehinde Kamson, said, “We will support Lagos State government on compliance and 100 per cent remittance. However, the government, through its agency, LIRS, should create a level playing ground for all shades of business in the hospitality industry by initiating this device across board especially the informal sector or unstructured businesses.”