Travel & Tourism

Multiple taxations, albatross of managing hotels in Nigeria –NHA

The Nigerian tax system, which main function like any other countries in the world, is to generate revenue for the running of the government at all levels, has been unfavourable to the hotel industry in Nigeria. There has been prevailing issues regarding multiplicity of taxes. The more the government attempts to check the menace of multiplicity of taxes in the hotel industry the more cases of recurring decimal of multiplicity of taxes rear its ugly head. This monster which is antithesis to the development of the sector has led to the stunted growth and congenital infantilism in the sector as when a new hotel is opening, tax authorities at all levels visit such facility, demanding all kinds of taxes.


Without fear of contradiction, as long as states in the federation desire to increase on their Internal Generated Revenue (IGR) as there has been a steady decline from federal allocations, hotels all over the country continue to be the veritable sources to augment federal allocations to states and this is at the detriment of the hotels and a great disincentive to hotels that are already over taxed. Economic Community for West African States (ECOWAS) calling on Nigerian government for upward review of the Value Added Tax (VAT) as it is the lowest in the region is absurd and a call to exterminate the hotel industry that has been contributing quite significantly to Nigerian economy. It is to our greatest consternation that the ECOWAS in midst of destruction to economies caused by COVID-19 pandemic worldwide would make such a suggestion to the federal government of Nigeria instead of initiating policies and programmes to cushion the effects of the pandemic on the sector so as to avoid social cataclysm and collapse, which will be counterproductive.

The damaged caused by COVID-19 on hotels in Nigeria has further subjected the industry to a standstill as hoteliers and investors are aghast at the harrowing untold hardship and financial travails. Not withstanding the precarious situation we are in, hotels in Nigeria are still able to pay numerous bills to wit, electricity bills, water bills and other several tax obligations. The chart reveals a dangerous trend in the cost of running hotels in Nigeria and the government is complicit about it even as federal government urged electricity consumers to bear the ‘minor’ increase by Nigeria Electricity Regulatory Commission (NERC) that is imminent and which to government is aimed at bridging the gap in the cost of electricity purchased by the distribution companies from the generating companies. We, therefore in view of the debilitating effects of the high cost of running hotels in Nigeria request that the federal government should extinguish the call by ECOWAS to increase VAT in Nigeria.

Taxes paid by hotels in Nigeria
1. Personal Income Tax (PIT)
2. Company’s Income Tax (CIT)
3. Education Tax (ET)
4. Value Added Tax (VAT)
5. Industrial Training Fund (ITF)
6. Pension Contribution
7. Development Levy
8. Nigeria Social Insurance Trust Fund (NSITF)
9. Consumption Tax
10. Gaseous Emission Tax
11. Environmental Tax/Waste Disposal Tax
12. Pay As You Earn (PAYE)
13. Tourism Development Levy
14. Signboard/Signage Fee
15. Land Use Charge/Tenement Rate
16. Ground Rent
17. Mobile Advert Fee
18. Radio/TV Fee
19. NASREA – Environmental Audit Reports
20. Withholding Tax
21. Capital Gains Tax
22. Hotel Occupancy and Restaurant Fee
*By Nigeria Hotels Association (NHA), Abuja




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