10 Key Provisions of the Proposed Lagos State VAT Law

A Bill to introduce a law for the imposition and administration of VAT in Lagos state is under consideration.

 

Below are the highlights of the proposed law:

1. The tax is to be administered by the Lagos State Internal Revenue Service (LIRS)
2. The rate of the tax is 6%
3. Section 16(2) requires an importer of taxable goods to pay the tax on the goods to the LIRS before clearing the goods (it is not clear how this will be implemented)
4. Taxable persons are to register for the tax within 6 months of the commencement of the law or 6 months of commencement of business whichever is earlier. Commencement date is yet to be indicated.
5. Based on section 9, nonresidents are to register for the tax if they carry on business in the state. There is no provision for self-charging of VAT
6. Monthly returns and remittance of VAT is due by the 21st of the succeeding month in a manner specified by the LIRS. This means the first return under the law will become due by 21st of month after enactment
7. Any appeal against the decision of the LIRS regarding the VAT matters goes to the VAT Appeal Tribunal to be established under the new law. Members are to be appointed by the governor on the recommendation of the Attorney-General and Commissioner for Justice.
8. The VAT revenue is to be shared 75% to the State and 25% to the Local Governments. 
9. The list of exempt items is similar to the old national VAT law including basic food items, medical services and educational materials
10. There is no registration exemption for small businesses unlike the N25m exemption under the national VAT Act.

Here is a copy of the draft VAT law Download Lagos State draft VAT law