Press Releases

LASG Appeals Ruling Against Hotel Occupancy And Restaurant Consumption Law
• Expresses surprise at the ruling of Federal High Court

Oct 19, 2009 - The Lagos State Government Monday appealed against the ruling of a Federal High Court in Lagos which restrained it from enforcing its Hotel Occupancy and Restaurant Consumption Law saying the court has no jurisdiction over the case.

The ruling which was made at Court 4, in the Federal High Court Ikoyi was the consequence of a case brought by the Registered Trustees of the Fast Food Confectioners of Nigeria against the Attorney General of the State challenging the validity of the Law.

Disclosing the appeal while briefing Government House Correspondents at the Bagauda Kaltho Press Centre in Alausa, the Special Adviser to the Governor on Taxation and Revenue, Mr. Ade Ipaiye, said the State Government also asked for a stay of execution of the ruling of the court.

Ipaiye said the grounds of the State Government’s appeal included the fact that the Court has no jurisdiction over the case since the Law is a State Government Law validly made by the State House of Assembly and assented to by the State Governor, while the revenue concerned is State Government revenue. Also, according to the Special Adviser, the plaintiffs are not the direct payers of the tax but mere collectors for the State Government.

He explained that when the case was instituted, the plaintiffs joined the Federal Inland Revenue Service in the case pointing out that no claim was made against the Service at the end of the day showing that it was only joined in an attempt to bring the case within Federal jurisdiction.

Expressing surprise at the Court ruling, the Special Adviser said the State Attorney General also opposed the plaintiffs’ application for a restraining order on the grounds that the court was yet to hear arguments about the validity of the State Law and based on established legal principles would not restrain a State from implementing a Law validly passed by the State House of Assembly.

“This decision revives the arguments on the practice of Federalism, the Rule of Law and Constitutionalism as we now have a situation in which a Federal Court restrains a State Government from the implementation of a State Law which is indeed a constitutional duty of the State Government”, Ipaiye said.

According to the Special Adviser, the ruling, however, concerns only the plaintiffs in the case whose membership strength is about 100 while a total of 1,099 establishments, made up of 410 Restaurants, 628 Hotels and 61 Event Centres, have already registered for the Law and are complying fully.

Ipaiye said Government is still doing a lot to enlighten the people on the necessity of the law adding, “As any resident or business owner in Lagos can see, we have several important developmental needs for which our collective efforts and contributions are necessary”.

Pointing out that in the major cities of the world consumption tax is practiced, Ipaiye said, “We want to reiterate that this Consumption tax is only on goods and services consumed in restaurants, hotels and event centres and it is payable only by the consumers and not operators of these establishments”.

Expressing appreciation of the State Government to the establishments that are complying with the Law, Ipaiye declared, “It is a price we have to pay for development and the State Government is very appreciative of those establishments that are complying with the Law by assisting in the collection process.

Earlier, in his introductory remarks, the Special Adviser to the Governor on Information and Strategy, Mr. Segun Ayobolu, explained that the Consumption tax law came about because of the extensive expansions going on in the State for which Government needs revenue to implement adding that the law is practiced in every major city of the world.

Also present at the occasion was the Senior Special Assistant to the Governor on Media, Mr. Hakeem Bello.