A new payment system that uses the Electronic Fiscal Device (EFD) for hotels, restaurants, nightclubs and event centres, has been introduced by the Lagos State Internal Revenue Service (LIRS) for stakeholders in the hospitality and tourism sector.
The new payment was officially launched in Lagos at a meeting between LIRS and Tourism stakeholders with the theme “Fiscalization of the Hotel Occupancy and Restaurant Consumption Tax Law” where the new Electronic Revenue Assurance System (ERA) was unveiled.
In his speech at the official ERA launch, Lagos state Governor, Mr. Akinwunmi Ambode represented by the Deputy Governor of the state, Dr. Mrs. Idiat Oluranti Adebule, reinstated his commitment to make Lagos state one of the largest economies and smartest cities in the world and appealed to business owners in Lagos state to key into the new ERA by promptly paying their consumption taxes through the newly introduced technology.
”Funds are required to enable the government to actualize 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.”
The Electronic Revenue Assurance System (ERA) is a software application/device that issues invoices and receipts to consumers bearing a unique QR code. The receipt will also contain detailing of the items and/or services ordered and an embedded automation of Consumption Tax remittance in real time.
According to Executive Chairman of the LIRS, Mr. Ayodele Subair, this tax remittance system “is aimed at facilitating ease of convenience with 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, patents a win-win situation for stakeholders, taxpayers collecting agents and the revenue administrators. The tax payers would benefit from various loyalty rewards schemes that have been designed to support this program. We would also benefit on the provision of infrastructure and social services which is where the resources being utilized is redeployed to. There’s going to be better transparency and accountability of the administration of the consumption tax law itself as well as reconciliation.”
Honorable Commissioner for Finance, Lagos state, Mr Akinyemi Ashade affirmed that the hotel occupancy and restaurant consumption (HORC) tax law is not a new law but an already existing law. He then assured that the new ERA 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, Honorable Commissioner for Economic Planning and Budget who shed more light on the reason for the HORC 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 state but we find it absolutely difficult to plan our revenue due to the aspect of the citizenry in Lagos and in some cases, we have an outright invasion of taxes.”
“In effect, we need to build our revenues the way we build our bridges if we are to succeed in our mission for Lagos. 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 Association of fast food confectioners of Nigeria, Mrs Kehinde Kamson stated that “We will support Lagos state government on compliance and 100 %remittance. However, the government through its agency, LIRS should create a level playing ground for all levels of business in the hospitality industry by initiating this device across the board especially the informal sector or unstructured businesses.