Court of Appeal upholds the FIRS’ powers to collect VAT on goods and services consumed in hotels, restaurants and event centres

On Friday, 1 July 2022, the Court of Appeal (CoA) affirmed the authority of the FIRS to collect VAT from all taxpayers including for goods and services consumed in hotels, restaurants and event centres. In doing this, the CoA set aside the Federal High Court (FHC) judgment of 2019, where the FHC had issued a converse judgement.

The CoA judgment aligns with the reasoning of the Supreme Court in Attorney General of Lagos State v. Eko Hotels Limited & Federal Board of Inland Revenue in 2017, where the Supreme Court held that VAT Act had covered the field of consumption tax, and so any similar tax would be invalid and result in double taxation. 

The continued legal tussle over consumption tax vis-a-vis VAT is not good for business, as it creates uncertainty and adversely impacts the ease doing business in Nigeria. Unfortunately, the decision of the CoA may not be the end of the disputes.

Please see our Tax Alert on this below:

Download PwC Tax Alert - CoA upholds the FIRS' powers to collect VAT on goods and services consumed in hotels restaurants and event centres