In line with the nationwide increase in the Value Added Tax (VAT), the Lagos State Consumption Tax will automatically increase to 12.2 per cent.
As the 7.2 per cent increase in Value Added Tax will be implemented, Businesses in Lagos State will have to pay 12.2 per cent on the sales of goods and services.
This was made known by Mr. Adedayo Bakare, an analyst with Afrinvest when speaking with newsmen in Wednesday, September 11, 2019.
Under a Sales Tax Law, the Lagos State Government for a long time has been collecting tax from restaurants and other retailers even though the Supreme Court has ruled against such in September 2018.
In his words, Mr. Adedayo Bakare said, “In Lagos, consumption tax is already 10 per cent because Lagos State charges five per cent VAT and there is also another consumption tax of five per cent.
“So, for Lagos State, automatically, consumption tax is 12.2 per cent.”
Mentioning the record by the Nigeria’s former finance Minister, Kemi Adeosun in 2018 on VAT collection, Mr. Bakare said that only about four states were generating most of the VAT. He said that the tax burden on just the few states is really not good at all.
He added, “Meanwhile, when they generate all these money, they will share it between 36 states when most of the money is generated in just four states.”
Having pointed out that the increase in VAT in the country is not inappropriate, Mr. Bakare said there should more concentration on how to expand the tax net.
He said further, “It is important that they widen the tax net to bring more informal businesses to the formal sector.”