Case Law – Hotel Regulations – States or Federal Government Authority

by Oserogho & Associates

In this Issue:-

1. Legal Alert – Case Law – Hotel Regulations – States or Federal Government Authority

2. Disclaimer Notice.

3. Copyright Notice.


On the 9th day of July 2013, the Supreme Court of Nigeria delivered its Judgement on the validity or otherwise of the Lagos State Hotel Licensing Law 2003, the 2009 Hotel Occupancy and Restaurant Consumption Tax Law of Lagos State, and the 2010 Hotel Licensing (Amendment) Law of Lagos State (“the Lagos State Hospitality Laws”).

Plaintiff’s Case

It was the contention of the Federal Government of Nigeria, as Plaintiff, that the implementation of the Lagos State Hospitality Laws, alongside those of the Federal Government of Nigeria, namely the Nigerian Tourism Development Corporation Act (“NTDC Act”) 1992, will have adverse and negative implications to the development of the Hospitality industry in Nigeria.

Defendant’s Rebuttal

In rebuttal, the Lagos State Government, as Defendant, contended that the NTDC Act was promulgated during the 1983 Federal Military regime, which regime suspended and subsequently amended the 1979 Constitution of the Federal Republic of Nigeria, under which the Lagos State Hospitality Laws were enacted.

It was also the contention of the Lagos State Government, in this law suit, that the NTDC Act regulates the licensing of Hotels as opposed to its constitutionally permitted regulation of tourism traffic which under the 1999 Constitution of the Federal Republic of Nigeria (“1999 Constitution”) (as amended) is an exclusive legislative list matter for the Federal Government and her agencies like the NTDC, to legislate on and regulate.

Supreme Court’s Decision

The Supreme Court, in delivering its final decision in this matter, reiterated the fact that Nigeria operates a Federal system of government, which recognises the separateness and independence of each federating unit, namely the Federal Government, the States, and the Federal Capital Territory.

The Supreme Court therefore held that in accordance with Section 4 (1) to (7), and Item 60 (D) of Part 1 of the Second Schedule of the 1999 Constitution (as amended), the Plaintiff, i.e. the Federal Government of Nigeria, is only authorised to regulate foreign tourist traffic in the entire Federal Republic of Nigeria. The Supreme Court further held that the Plaintiff, i.e. the Federal Government of Nigeria, does not however have the constitutional authority to legislate on the regulation of Hospitality or tourist related establishments as this was a residual matter for the States’ Houses of Assembly to legislate on.

In the light of the above legal position, the Supreme Court of Nigeria further held that the provisions of the Nigerian Tourism Development Corporation Act, which regulates tourist or Hospitality related establishments, were null and void, while the Lagos State Hospitality Laws are intra vires, i.e. within the scope of the constitutional power of the Lagos State Government to regulate these establishments, but only in Lagos State.

Consumption Tax vs. VAT – Ratio Decidendi or Obiter Dictum?

The submissions of the parties in this case, which formed the basis of the Supreme Court decision, was which of the federating units has the constitutional authority to legislate on matters pertaining to the registration, classification, grading and other regulatory matters that affect tourist related establishments like Hotels, Motels, Restaurants, Fast Food Outlets, Guest Inns, Apartments, Travels Agencies, Tour Operating Outfits, etc.

The constitutionality or otherwise, of the Federal Value Added Tax Act (as amended) and the Lagos State Hotel Occupancy and Restaurant Consumption Tax Law was not canvassed in this matter.

The final decision of the Supreme Court did not therefore address the validity of the Lagos State Hotel Occupancy and Restaurant Consumption Law vis-à-vis the Federal Value Added Tax Act (as amended). The effect of this development is the continuing combined imposition of a State Sales or Consumption Tax and a Federal Value Added Tax on the same transaction or purchases in Lagos and Edo States. This position, it must be said, amounts to double taxation.

As Sales Tax is arguably a residual matter for the States’ Houses of Assembly to legislate on, the parties in this suit, and other States that have enacted their Sales or Consumption Tax Laws, like Edo State, will be serving the greater economic development of Nigeria if they return to the Supreme Court of Nigeria to obtain legal validation on State or Federal Sales or Consumption Tax impositions, both in Lagos State and in the rest of the Federal Republic of Nigeria.

DISCLAIMER NOTICE. This Legal Alert is a free educational material, for your general information and enlightenment purpose ONLY. This Alert, by itself, does not create a Client/Attorney relationship between yourself and our Law Firm. Recipients are therefore advised to seek professional legal advice and counselling to their specific situati

LOADING PDF: If there are any problems, click here to download the file.

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

© Oserogho & Associates | Attorney Advertising

Written by:

Oserogho & Associates

Oserogho & Associates on:

Readers' Choice 2017
Reporters on Deadline

"My best business intelligence, in one easy email…"

Your first step to building a free, personalized, morning email brief covering pertinent authors and topics on JD Supra:
Sign up using*

Already signed up? Log in here

*By using the service, you signify your acceptance of JD Supra's Privacy Policy.
Privacy Policy (Updated: October 8, 2015):

JD Supra provides users with access to its legal industry publishing services (the "Service") through its website (the "Website") as well as through other sources. Our policies with regard to data collection and use of personal information of users of the Service, regardless of the manner in which users access the Service, and visitors to the Website are set forth in this statement ("Policy"). By using the Service, you signify your acceptance of this Policy.

Information Collection and Use by JD Supra

JD Supra collects users' names, companies, titles, e-mail address and industry. JD Supra also tracks the pages that users visit, logs IP addresses and aggregates non-personally identifiable user data and browser type. This data is gathered using cookies and other technologies.

The information and data collected is used to authenticate users and to send notifications relating to the Service, including email alerts to which users have subscribed; to manage the Service and Website, to improve the Service and to customize the user's experience. This information is also provided to the authors of the content to give them insight into their readership and help them to improve their content, so that it is most useful for our users.

JD Supra does not sell, rent or otherwise provide your details to third parties, other than to the authors of the content on JD Supra.

If you prefer not to enable cookies, you may change your browser settings to disable cookies; however, please note that rejecting cookies while visiting the Website may result in certain parts of the Website not operating correctly or as efficiently as if cookies were allowed.

Email Choice/Opt-out

Users who opt in to receive emails may choose to no longer receive e-mail updates and newsletters by selecting the "opt-out of future email" option in the email they receive from JD Supra or in their JD Supra account management screen.


JD Supra takes reasonable precautions to insure that user information is kept private. We restrict access to user information to those individuals who reasonably need access to perform their job functions, such as our third party email service, customer service personnel and technical staff. However, please note that no method of transmitting or storing data is completely secure and we cannot guarantee the security of user information. Unauthorized entry or use, hardware or software failure, and other factors may compromise the security of user information at any time.

If you have reason to believe that your interaction with us is no longer secure, you must immediately notify us of the problem by contacting us at In the unlikely event that we believe that the security of your user information in our possession or control may have been compromised, we may seek to notify you of that development and, if so, will endeavor to do so as promptly as practicable under the circumstances.

Sharing and Disclosure of Information JD Supra Collects

Except as otherwise described in this privacy statement, JD Supra will not disclose personal information to any third party unless we believe that disclosure is necessary to: (1) comply with applicable laws; (2) respond to governmental inquiries or requests; (3) comply with valid legal process; (4) protect the rights, privacy, safety or property of JD Supra, users of the Service, Website visitors or the public; (5) permit us to pursue available remedies or limit the damages that we may sustain; and (6) enforce our Terms & Conditions of Use.

In the event there is a change in the corporate structure of JD Supra such as, but not limited to, merger, consolidation, sale, liquidation or transfer of substantial assets, JD Supra may, in its sole discretion, transfer, sell or assign information collected on and through the Service to one or more affiliated or unaffiliated third parties.

Links to Other Websites

This Website and the Service may contain links to other websites. The operator of such other websites may collect information about you, including through cookies or other technologies. If you are using the Service through the Website and link to another site, you will leave the Website and this Policy will not apply to your use of and activity on those other sites. We encourage you to read the legal notices posted on those sites, including their privacy policies. We shall have no responsibility or liability for your visitation to, and the data collection and use practices of, such other sites. This Policy applies solely to the information collected in connection with your use of this Website and does not apply to any practices conducted offline or in connection with any other websites.

Changes in Our Privacy Policy

We reserve the right to change this Policy at any time. Please refer to the date at the top of this page to determine when this Policy was last revised. Any changes to our privacy policy will become effective upon posting of the revised policy on the Website. By continuing to use the Service or Website following such changes, you will be deemed to have agreed to such changes. If you do not agree with the terms of this Policy, as it may be amended from time to time, in whole or part, please do not continue using the Service or the Website.

Contacting JD Supra

If you have any questions about this privacy statement, the practices of this site, your dealings with this Web site, or if you would like to change any of the information you have provided to us, please contact us at:

- hide
*With LinkedIn, you don't need to create a separate login to manage your free JD Supra account, and we can make suggestions based on your needs and interests. We will not post anything on LinkedIn in your name. Or, sign up using your email address.