The court of appeal sitting in Lagos, has granted the Federal Inland Revenue Service (FIRS), the right to value-added tax (VAT) from Lagos hoteliers.

VAT is a consumption tax payable when goods are purchased and services are rendered.

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.

Displeased with the verdict, FIRS proceeded to the court of appeal and subsequently secured a stay of execution pending the outcome of the appeal.

In its ruling on Friday, the court set aside the federal high court’s judgement, and affirmed FIRS’ authority to collect VAT from all taxpayers.

The appeal court also struck out a counter-claim filed by the Lagos State Government against the FIRS.

DIPLOMATIC DIARY reports an ongoing legal tussle between FIRS and some state governments including Rivers , Lagos, on the issue of VAT collection. 

However, no date has been fixed for the hearing of the case at the supreme court.