LIRS to automate collection of consumption tax using Electronic Revenue Assurance system

The Lagos State Internal Revenue Service (LIRS) has introduced an Electronic Revenue Assurance (ERA) system for the collection of consumption taxes from hotels, night clubs and event centres (hospitality outlets) in Lagos State.

The ERA system is a software application that issues invoices and receipts to consumers with a unique quick response (QR) code, detailing the items and/or services ordered and an embedded automation of consumption tax remittance in real time. The ERA system works using an electronic fiscal device and is expected to ensure accountability, efficiency and transparency in the collection of consumption tax.

This move by LIRS is aimed at engendering automatic compliance with the Hotel Occupancy and Restaurant Consumption Tax Law of Lagos as amended (the Law). The Law imposes 5% consumption tax on all sales/purchases of products and services at hospitality outlets in Lagos State.

To forestall non-compliance, LIRS intends to track and monitor payments and receipts in order to verify the authenticity of receipts issued to consumers. There will also be a reward scheme for taxpayers who request for receipts generated under the ERA system.

This is a welcome development as it facilitates the increased drive towards automation of the Nigerian tax processes. This enlightenment drive should also assure business owners that the ERA system has adequate security features to prevent cyber fraud. We will continue to monitor further developments in this space and provide further updates as soon as they become available.


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