Governor Babajide Sanwo-Olu
*The Bill Details
Lagos State Governor Babajide Sanwo-Olu has signed into law the State VAT Bill as passed by the House of Assembly.
This is contained in a statement signed by Mr Gbenga Omotoso, Commissioner for Information and Strategy.
The Governor signed the “bill for a law to impose and charge VAT on certain goods and services” at about 11.45 am today, after returning from an official trip to Abuja.
By this act, the Bill has now become a Law.
The Bill Details
Highlighted below are some key provisions of the Bill, according to an article published on home.kpmg by Wole Obayomi, Partner and Head, Tax, Regulatory and People Services KPMG in Nigeria
- VAT to be charged at the rate of 6% on taxable supplies of goods and services, other than those expressly exempted or designated as zero rated in the Schedules to the Bill.
- The Lagos State Internal Revenue Service (LIRS) will be responsible for administration and implementation of the Bill.
- Companies resident in Lagos State are required to register with LIRS for VAT within 6 months of commencement of the Bill, or 6 months from commencement of business, whichever is earlier.
- Monthly VAT returns and remittances would be due by the 21st day of each month following the month of the transaction.
- Failure to submit VAT returns to the LIRS attracts a penalty of ₦500,000 for each month of default.
- Failure to remit VAT will attract a penalty of 5% per annum plus interest at the commercial rate of the amount of tax remittable, in addition to the outstanding tax.
- 75% of the collections will be allocated to State Government while 25% will be distributed to Local Governments based on derivation principle.
- Establishment of a VAT Appeal Tribunal to resolve disputes arising from additional tax assessment set out under the provisions of the Bill.