The Chairman of the Lagos State Internal Revenue Service, Mr. Ayodele Subair, says the newly introduced Electronic Revenue Assurance system is expected to increase the state’s consumption tax revenue by 400 per cent.
The LIRS had recently unveiled an automated invoicing system and technology device called ERA at a stakeholders’ meeting held with hotel operators and business owners in the hospitality industry.
In line with global best practice in the use of technology and automated solutions, the tax agency said the ERA would elicit automatic compliance in the collection of consumption taxes from hospitality outlets in the state.
In an interview with journalists in Lagos, the LIRS chairman said most forward- looking organisations were adopting technology in their approach to doing business, and the state was not different, noting that ERA had been introduced in some countries.
Specifically, Subair said ERA would enhance improvement in the collection and remittance of consumption taxes.
“Last year on the average, we were getting between N200m to N250m a month, and we anticipate that before the end of the year we will be getting between N800m and N1bn with the use of this technology,” he said
According to him, the state has been a trailblazer in introducing efficiency to the collection of taxes.
He said ERA was a Public-Private Partnership arrangement, in which the partner bore the cost and would be settled by the internal revenue service.
Subair said, “The Hotel Occupancy and Consumption Tax was established in 2009 and we have not been efficient in the collection due to sharp practices by the hotel owners and other businesses. In order to block leakages and improve on the efficiency in the system, we decided to apply this technology.”
Remarking on why individuals and corporate entities must comply with the payment of the taxes, the LIRS boss said, “You have to comply because it is the law. There are lots of benefits both on the side of the hotel owners and the consumers of their services. It will increase accountability and transparency to the business owner.
“It is electronic and is online real time. No matter where you are, you can view your transaction on an item- by-item basis. On the side of the consumer, there will be a raffle draw weekly, monthly and annually; and in each raffle draw your entry ticket is the invoice that you will get from the hotels. It is an electronic system and it has a unique ID number. Every receipt has a unique ID number. With the ticket, you have entry to the raffle which will be done using the best global practices and the Lagos State Lottery Board is supervising it.
He added, “The benefit to the tax authority includes: blocking of all leakages, increase in revenue, availability of more funds for development, efficiency, and it saves time as it can be monitored directly from the server. If there is a drop in sales, we will investigate it. It is a win-win situation.”
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