The Consumption tax compliance in the hospitality sector of Imo State has experienced a spike as IIRS records the highest consumption tax remittance since the passage of the Imo State Hotel Occupancy and Restaurant Consumption Law (Consumption tax) in December 2019.
Speaking to newsmen in Owerri, the Interim Chairman/CEO, IIRS, Dr Ifeanyi C. Okeke FCA, gives the reason as the continued sensitisation the service has embarked on within the sector resulting in many businesses in the hospitality sector routinely filing consumption tax.
This comes on the heels of the mandatory instruction given to practitioners in the industry to ensure the imputation of a 5% consumption tax in their billing systems.
In 2019, the Imo State House of Assembly enacted the Hotel Occupancy and Restaurant Consumption Law, No. 35 (Also known as the Hotel Consumption Law), which imposes a consumption tax at a 5% rate on the value of goods and services consumed by any persons in hotels, restaurants, bars, night clubs, recreational centres and event centres within the State.
The critical factor for the adoption of this tax is that it is paid by a consumer at the spot of service and not from the operator’s purse.
Hence, with systemic compliance of businesses in the sector, it will be possible for the state to fully harness these taxes and for companies to comply without difficulties since what you collect is what you remit.