Hotel Operators Demand Tax Reform, Better Power Supply
By AMANDA EZE
Operators Raise Alarm Over Rising Costs
HOTEL operators in Nigeria have called for urgent reforms to multiple taxation and electricity supply, warning that rising operating costs are putting jobs, investment and the long-term sustainability of the hospitality industry under pressure.
The National Secretary of the Nigerian Hotels Association (NHA), Prince Amos Uyo, made the call while discussing the hospitality and tourism sector on DOTT TV in Asaba, Delta State.
Uyo said hotels were already contributing to government revenue through taxes and levies paid across the three tiers of government, but operators were increasingly burdened by overlapping charges imposed by different agencies.
More Than 25 Taxes & Levies
According to Uyo, hotel operators contend with more than 25 taxes, levies, rates and regulatory charges from federal, state and local authorities, as well as some non-governmental organisations.
He listed federal obligations including Company Income Tax, Value Added Tax, Education Tax, NITDA Levy and Police Trust Fund Levy. At the state and local levels, operators may also face tourism levies, hotel occupancy and consumption taxes, environmental levies, fire service charges, tenement rates, signage fees, waste disposal charges, liquor licences and health permits.
Uyo stressed that the association was not opposed to legitimate taxation but was concerned about duplication and poor coordination among collecting agencies.
He said hotels could be visited by several agencies seeking separate payments and, in some cases, operators faced threats of sealing their premises or arbitrary assessments when they could not immediately meet demands.
NHA Proposes Single-Window System
To address the problem, the association is advocating a harmonised hospitality taxation system based on a single-window collection platform.
Under the proposal, legitimate taxes and levies payable by hotels would be collected through one system before being distributed among the federal, state and local governments according to an agreed formula.
Uyo also proposed limiting the number of major charges imposed on hotels to five: VAT, Company Income Tax, Tourism Levy, Tenement Rate and Waste Levy.
He called for the creation of a National Tourism Tax Ombudsman to receive complaints from operators and investigate allegations of harassment or unlawful collections by government agencies.
Calls for Investment Incentives
The NHA official further urged government to introduce incentives for new hotel investments, including a five-year tax holiday and single-digit interest loans.
He argued that reducing the initial financial burden on investors could encourage new projects, create employment and eventually expand government revenue.
The association also wants the National Assembly, particularly the Senate Committee on Tourism, to sponsor legislation that would harmonise hospitality taxes and establish clearer regulatory rules for the industry.
It further called for mandatory consultation with hotel operators before new levies are introduced.
Electricity Costs Add to the Burden
Beyond taxation, Uyo identified unreliable electricity supply as another major challenge confronting hotels.
He said operators are frequently forced to finance electricity infrastructure and maintain alternative power sources, adding substantially to their operating expenses.
Uyo recalled that he personally spent more than N20 million to extend a commercial electricity line to his hotel, including the cost of cables and a transformer.
He questioned why operators could still be required to pay distribution companies for services connected to infrastructure they had substantially financed themselves.
Wider Economic Impact
According to the NHA secretary, the consequences extend beyond hotels because the hospitality industry supports transportation, food production, entertainment, retail and other businesses.
He illustrated the relationship using the example of visitors arriving in Asaba for conferences and other activities.
“When people travel and come to Asaba, when there are meetings and conferences in Asaba, there is an influx of people. The hotel will smile, the market woman selling will sell, and the transportation operators will also benefit.”
The association said more than 30 per cent of small hotels had closed or downsized over the previous 24 months because of operating costs, a claim attributed to the NHA’s position paper.
Uyo said the sector was willing to pay legitimate taxes and contribute more to national development, but argued that a coordinated approach by the three tiers of government was necessary to keep businesses viable, protect jobs and stimulate investment.
