Lagos State Governor, Mr. Babajide Sanwo-Olu, Friday, signed the bill to impose value added tax on goods and services in the state into law.
The state Commissioner for Information and Strategy, Mr. Gbenga Omotosho, disclosed this in a press statement, Friday. He said the governor signed the “bill for a law to impose and charge VAT on certain goods and services” in Lagos State.
“By this act, the Bill has now become a Law,” Omotosho continued.
The Lagos State House of Assembly had, on Thursday, September 9, 2021, passed both the state’s Value Added Tax (VAT) bill as well as the bill banning open grazing of cattle in the state.
By this act, Omotosho further explained, the Lagos State Internal Revenue Service (LSIRS) has consequently been empowered to administer and implement the law; and account for money collected in accordance with the law.
With the new VAT law, titled: “Lagos State Value Added Tax Law: A Bill for a Law to Impose and Charge Value Added Tax On Certain Goods And Services, Provide for the Administration of the Tax and for Related Matters,” the state will henceforth charge six percent VAT on the value of goods and services in the state.
The law also stipulates that “the value of taxable goods and services shall be determined in the following ways: where the supply is for a money consideration, its value shall be deemed to be an amount which with the addition of the tax chargeable is equal to the consideration.”
The law further states that revenue accruing from VAT would be shared on a ratio of 75 per cent to 25 per cent between the state government and the Local Government Council Areas.
With this development, Lagos State becomes the second state, after Rivers State, to have a VAT law that empowers it to collect the tax despite an ongoing legal tussle between Rivers State and the Federal Inland Revenue Service (FIRS).
Recall that a Federal High Court in Port Harcourt had, in August, restrained the FIRS from collecting VAT and personal income tax in Rivers State. But the FIRS announced, on Wednesday, that it had appealed the judgment.
“Be assured that FIRS has filed an appeal and that one is in process and that is why we are not able to speak,” FIRS Group Lead, Special Tax Operations, Matthew Gbonjugbola, told a press conference on Wednesday.