News
LIRS Tasks Business Organizations On Consumption Tax Compliance
Lagos State Internal Revenue Service (LIRS) has urged owners of restaurants, hotels, and event centres operating in the state to contribute to the state’s development by prioritizing the monthly collection and remittance of a 5% consumption tax on all consumables and personal services.
The State on June 22, 2009, enacted the Hotel Occupancy and Restaurant Consumption Law of Lagos State otherwise called Hotel Consumption Law, which imposes consumption tax at 5% on the value of goods and services consumed in hotels, restaurants and event centers within the state. The tax base is the total cost of facilities, consumables or personal services supplied to a consumer in, by or on behalf of the hotel, restaurant or events centre.
Speaking on The Tax Talk programme monitored on TVC on Wednesday, Jimi Aina, Director, New Growth, LIRS, said while the consumption tax is a major source of revenue for the Lagos State Government, which uses the funds to provide public amenities and services such as healthcare, education, transportation, and security, owners of restaurants, hotels, event centres, etc are obligated to register with the LIRS as collecting agents.
Aina submitted that contrary to the misconception a lot of people have about consumption tax, the state has not imposed additional taxes on restaurants, hotels and event centres, rather, consumers who purchase taxable goods or services in the state are responsible for paying the consumption tax. The tax is already included in the price of the goods or services and is paid to the collecting agent who collects it on behalf of the Lagos State Government.
“Many people misunderstand the concept of consumption tax. It is often thought that this tax is an additional burden on hotels and restaurants, but this is not the case. In reality, it is the customers who are taxed when they dine out, attend events, or have drinks at a bar. The tax rate is five per cent. By paying the consumption tax, consumers contribute to the development and maintenance of these amenities and services.”
“According to Section 1 of the Lagos State Consumption Tax Law, consumption tax is defined as a tax on the supply of goods and services in Lagos State, which is charged and payable by the consumer.
“Consumers who purchase taxable goods or services in Lagos State are responsible for paying consumption tax. The tax is included in the price of the goods or services and is paid to the collecting agent who collects it on behalf of the Lagos State Government,” he said.
Speaking further, the New Growth Director said while collecting agents (restaurants, hotels and event centres) have the responsibility of collecting these taxes from consumers and remitting to the LIRS, it’s also important to factor in the deadline for remittances.
He explained; “According to the Lagos state consumption tax law, the remittances must be made not later than the 20th day of the month following the month of collection. For example, consumption tax collected in September must be remitted to the LIRS on or before the 20th of October.
Aina noted that there are legal implications to non-remittances by collecting agents who failed to remit consumption tax collected from consumers to the LIRS within the prescribed time.
“Where a Collecting Agent fails to make a return or remittances as and when due, LIRS may make an estimate of the total amount due and such estimate shall become due not later than 21 days of service of such a notice.
“Failure to remit the tax collected within the stipulated time will attract a 10% penalty of an amount not remitted plus interest at 5% above the prevailing Monetary Policy Rate of CBN of Nigeria. Such collecting agent may also face sanctions including closure of business and prosecution,” he submitted.
According to the LIRS, the monthly filing of returns on sales using UCL 2 form must be accompanied by a report stating:
- The total amount of payments made for all chargeable transactions during the preceding reporting period.
- The amount of consumption tax collected by the agent during the reporting period.
- Any other information required by LIRS to be included in the report.
Every collecting agent is required to keep, maintain and preserve such records, books and accounts in respect of all transactions chargeable under the Law as hotels, restaurants and other businesses affected by this Law are required to register with LIRS and keep records of Evidence of registration as a Collecting Agent.
The UK Government has announced the appointment of Mr Peter Vowles as the next British High Commissioner to the Federal Republic of Nigeria.
Mr Vowles succeeds Dr Richard Montgomery CMG and is expected to take up his post in Abuja in September 2026. Dr Montgomery remains in post until that time.
Mr Vowles brings extensive diplomatic and development experience to the role, having served as His Majesty’s Ambassador to Zimbabwe from 2023 to 2026 and previously as Ambassador to Myanmar from 2021 to 2022.
He has held senior leadership positions across the FCDO and its predecessor department DFID, including as Transformation Director and Director for Asia, Caribbean and Overseas Territories.
Earlier in his career, Mr Vowles worked in international development across South Asia, Central Africa and East Africa, including postings in Bangladesh, India, the Democratic Republic of Congo and Kenya. He began his career in Zimbabwe, where he worked in education and development.
Peter Vowles said: “I am honoured to be appointed as British High Commissioner to Nigeria. Nigeria is a country of immense importance to the United Kingdom, and I look forward to working closely with Nigerian partners to strengthen our relationship across trade, development and security.”
World Bank has ranked the Apapa and Tin Can Island Port complexes in Lagos among the world’s 20 most improved ports in its 2025 Container Port Performance Index (CPPI), released in June 2026.
The ranking places both ports in the “Top 20 Port Improvement Since 2020” category, reflecting significant gains in operational efficiency and vessel turnaround time.
The CPPI is a global benchmark used to assess the efficiency of container ports based on factors such as cargo handling speed, ship turnaround time and overall logistics performance.
According to the report, the improvement highlights ongoing reforms and modernization efforts within Nigeria’s maritime sector.
The Managing Director of the Nigerian Ports Authority (NPA), Mr Abubakar Dantsoho, attributed the recognition to ongoing policy reforms and infrastructure upgrades in the sector.
He said the development reflects the impact of economic policies of President Bola Tinubu and the support of the Minister of Marine and Blue Economy, Mr Adegboyega Oyetola.
“With the investor-friendly policies of President Bola Ahmed Tinubu providing the impetus for increased investment to drive our port infrastructure and equipment modernisation programme, coupled with the unflinching support of the Honourable Minister of Marine and Blue Economy, Adegboyega Oyetola, we have all it takes to further enhance trade facilitation, improve competitiveness and boost the national economy,” he said.
The NPA said the recognition is expected to strengthen investor confidence in Nigeria’s maritime sector and enhance the country’s position as a regional trade and logistics hub.
It noted that improvements in port operations are already contributing to increased efficiency in cargo movement and reduced delays at key terminals.
The authority also pointed to ongoing efforts to modernise port infrastructure and expand digital systems aimed at improving service delivery.
Earlier in February 2026, the NPA said the federal government had intensified efforts to position Nigeria as a leading maritime destination through port rehabilitation and modernization projects.
It also highlighted public-private partnership initiatives, including developments at the Lekki Deep Sea Port, as part of broader reforms aimed at improving efficiency and attracting investment.
The CPPI ranking is expected to further boost Nigeria’s maritime profile and encourage additional investment in the sector.
As digital payment adoption continues to grow across Nigeria and emerging markets, the next phase will depend not just on innovation, but on the strength, reliability, and trustworthiness of the infrastructure behind it.
While the ecosystem has made clear progress in recent years, trust remains a critical issue for users, businesses, and operators alike. Questions around resilience, security, interoperability and transaction reliability continue to shape how the market evolves and how confidently digital payments can scale.
These issues will be central to the deliberations at Digital Pay Expo 2026, where fintech leaders, payment operators, and other ecosystem stakeholders will gather under the theme, “Seamless Digital: Fostering Pan-African Market Expansion in the Era of AI.”
PalmPay’s participation reflects its continued commitment to building trusted and scalable payment infrastructure, while contributing to the broader industry efforts to strengthen systems, standards, and partnerships needed to support long-term ecosystem growth.
Speaking ahead of the event, Olorunfemi Hanson, Head of Marketing and Communications at PalmPay Nigeria, said: “As the financial services ecosystem continues to grow, trust and reliability become even more important.
“The industry’s next phase will be shaped not only by innovation, but by the strength of the infrastructure supporting it. Digital Pay Expo provides an important platform to address the resilience, interoperability, and trust issues that will shape the future of digital payments growth across Africa.”
The event, scheduled to be held from the 17th to the 18th of June, 2026, will feature Chika Nwosu, Managing Director of PalmPay Nigeria, alongside other distinguished guests, including the Director-General, Payment System Management Department (PSMD), Central Bank of Nigeria. The event will examine how the industry can balance innovation, regulation, and scalability while strengthening trust across the digital payments value chain.
For PalmPay, this event reinforces its role in supporting a more resilient, secure and scalable payments ecosystem for Nigeria and emerging markets more broadly.
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