Operators list challenges of hospitality industry in Enugu
The operators of hotels in Enugu State have said that multiple taxation imposed by the state government and epileptic power supply are crippling their businesses in the state.
They noted that doing hotel business in the state was no longer as fruitful as it used to be because of “terrible” economic challenges in the industry.
Some of the operators who spoke with the News Agency of Nigeria in separate interviews on Friday, listed their challenges to include multiple taxation, scarcity of water, insecurity and power outages.
An operator, Edwin Madugba, said hotels could not do without power, adding that most of them ran their generators a whole day and beyond to supply light to their guests.
According to him, when there is no power supply, they will be subjected to the use of diesel which they currently buy at N1,300 per litre.
“What volume of sales will one make to recoup? A lot of hotels now ration hours of giving light,” he said.
Multiple taxes?
On state taxes, Mr Madugba listed the levies on hotels to include demand notices from Enugu State Waste Management Agency, taxes from Enugu North Council Area, Ministry of Health, Enugu State Internal Revenue Services and others.
“Sometimes they are asking hotels to pay between N500,000 and N1 million under this hard and harsh economy,” he said.
He added that they paid much on security which exposed them to loss of revenue.
“Under normal situation, we are not supposed to hire armed men to guard hotels.”
Mr Madugba appealed to governments to reduce taxes on hotels and put other infrastructure in place.
‘Purchase tax is new to us’
Another operator, who did not want his name mentioned in the story, told NAN that despite Governor Peter Mbah’s effort to fight insecurity in the state, many people hardly come to the South-east to host ceremonies like weddings and conferences.
He explained that before now, people used to rush to Enugu from Lagos, Abuja and other places because it was a peaceful state, regretting that they hardly come for fear of insecurity.
He added that the government should be thanking people in the private sector for providing employment but instead, it over-burdened them with taxes.
“Apart from normal tax we know, there are some other kinds of foreign taxes they imposed on us.
“Take for instance, the purchase tax they introduced and up till now they are still trying to explain to us what it is.
“We have not heard of it until this government came into power. Purchase tax is new to us. These taxes are killing hotel businesses in Enugu.
“They should be encouraging us as it is difficult to run hotel businesses in Enugu, rather, the government discourages us,” he lamented.
He stressed that the issue of water was worse than tax as a full tanker of water was about N40,000.
“In a week, if your occupants are 50, you will need over 10 tankers for them to use your facilities.
Govt reacts
When contacted on the matter, the chairperson, Tourism Practitioner of Nigeria, Enugu chapter, Amos Ogbu, declined comment.
Responding to the issue of tax, the Chairperson, Enugu State Internal Revenue Services, Emmanuel Nnamani, said there were no multiple taxes in the hotel industry.
He said that what they were implementing in the hotels was purchase tax which was the Enugu State version of consumption tax.
He explained that the tax was imposed on certain goods and services which included all services rendered by hotels, be it accommodation, lodging or drinks and they were aware of it.
Mr Nnamani said the tax had been in the state law since 2004 but was introduced in October 2023 which was being implemented.
“Because it covers hotel activities, it is not the hotel that pays but the customers.
For instance, if the hotel bill is N50,000, we ask that customers pay five per cent; what the hotel is expected to do is to charge customers N52,500.
ALSO READ: Why we’re suspending our businesses in Enugu – Sachet water producers
“They will remit N2,500 to Enugu State, so they are not paying from their purse.
“The Pay As You Earn is not the hotel that pays it but its staff. Their job is to deduct and pay to the state government while Value Added Tax to the federal government is not paid by hotels but by customers.
“Aside from the purchase tax, hotels pay profit tax, which they pay to the federal government and the sanitation because they generate waste which is being managed by the state government.
“Others are business premises renewal and water bill,” he said.
What govt is doing about water scarcity
On the scarcity of water, the State Commissioner for Water Resources, Felix Nnamani, said the state had over 120 million litres of water to distribute to the Enugu people.
Mr Nnamani said the delay was due to the ongoing maintenance on the water reticulation lines as the government changed old pipes, adding that the government had cleaned up and refurbished old reservoirs.
He said there was a partnership between the state ministries of Water Resources and Works.
“As they do the roads, we dig our holes and lay our pipes and that is causing the delay.
“It will be wrong after putting asphalt on the road, you will start cutting it to lay pipes. So we don’t want that to arise considering the economic situation we found ourselves globally,” he said.
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The operators of hotels in Enugu State have said that multiple taxation imposed by the state government and epileptic power supply are crippling their businesses in the state.
They noted that doing hotel business in the state was no longer as fruitful as it used to be because of “terrible” economic challenges in the industry.
Some of the operators who spoke with the News Agency of Nigeria in separate interviews on Friday, listed their challenges to include multiple taxation, scarcity of water, insecurity and power outages.
An operator, Edwin Madugba, said hotels could not do without power, adding that most of them ran their generators a whole day and beyond to supply light to their guests.
According to him, when there is no power supply, they will be subjected to the use of diesel which they currently buy at N1,300 per litre.
“What volume of sales will one make to recoup? A lot of hotels now ration hours of giving light,” he said.
Multiple taxes?
On state taxes, Mr Madugba listed the levies on hotels to include demand notices from Enugu State Waste Management Agency, taxes from Enugu North Council Area, Ministry of Health, Enugu State Internal Revenue Services and others.
“Sometimes they are asking hotels to pay between N500,000 and N1 million under this hard and harsh economy,” he said.
He added that they paid much on security which exposed them to loss of revenue.
“Under normal situation, we are not supposed to hire armed men to guard hotels.”
Mr Madugba appealed to governments to reduce taxes on hotels and put other infrastructure in place.
‘Purchase tax is new to us’
Another operator, who did not want his name mentioned in the story, told NAN that despite Governor Peter Mbah’s effort to fight insecurity in the state, many people hardly come to the South-east to host ceremonies like weddings and conferences.
He explained that before now, people used to rush to Enugu from Lagos, Abuja and other places because it was a peaceful state, regretting that they hardly come for fear of insecurity.
He added that the government should be thanking people in the private sector for providing employment but instead, it over-burdened them with taxes.
“Apart from normal tax we know, there are some other kinds of foreign taxes they imposed on us.
“Take for instance, the purchase tax they introduced and up till now they are still trying to explain to us what it is.
“We have not heard of it until this government came into power. Purchase tax is new to us. These taxes are killing hotel businesses in Enugu.
“They should be encouraging us as it is difficult to run hotel businesses in Enugu, rather, the government discourages us,” he lamented.
He stressed that the issue of water was worse than tax as a full tanker of water was about N40,000.
“In a week, if your occupants are 50, you will need over 10 tankers for them to use your facilities.
Govt reacts
When contacted on the matter, the chairperson, Tourism Practitioner of Nigeria, Enugu chapter, Amos Ogbu, declined comment.
Responding to the issue of tax, the Chairperson, Enugu State Internal Revenue Services, Emmanuel Nnamani, said there were no multiple taxes in the hotel industry.
He said that what they were implementing in the hotels was purchase tax which was the Enugu State version of consumption tax.
He explained that the tax was imposed on certain goods and services which included all services rendered by hotels, be it accommodation, lodging or drinks and they were aware of it.
Mr Nnamani said the tax had been in the state law since 2004 but was introduced in October 2023 which was being implemented.
“Because it covers hotel activities, it is not the hotel that pays but the customers.
For instance, if the hotel bill is N50,000, we ask that customers pay five per cent; what the hotel is expected to do is to charge customers N52,500.
ALSO READ: Why we’re suspending our businesses in Enugu – Sachet water producers
“They will remit N2,500 to Enugu State, so they are not paying from their purse.
“The Pay As You Earn is not the hotel that pays it but its staff. Their job is to deduct and pay to the state government while Value Added Tax to the federal government is not paid by hotels but by customers.
“Aside from the purchase tax, hotels pay profit tax, which they pay to the federal government and the sanitation because they generate waste which is being managed by the state government.
“Others are business premises renewal and water bill,” he said.
What govt is doing about water scarcity
On the scarcity of water, the State Commissioner for Water Resources, Felix Nnamani, said the state had over 120 million litres of water to distribute to the Enugu people.
Mr Nnamani said the delay was due to the ongoing maintenance on the water reticulation lines as the government changed old pipes, adding that the government had cleaned up and refurbished old reservoirs.
He said there was a partnership between the state ministries of Water Resources and Works.
“As they do the roads, we dig our holes and lay our pipes and that is causing the delay.
“It will be wrong after putting asphalt on the road, you will start cutting it to lay pipes. So we don’t want that to arise considering the economic situation we found ourselves globally,” he said.
Support PREMIUM TIMES’ journalism of integrity and credibility
Good journalism costs a lot of money. Yet only good journalism can ensure the possibility of a good society, an accountable democracy, and a transparent government.
For continued free access to the best investigative journalism in the country we ask you to consider making a modest support to this noble endeavour.
By contributing to PREMIUM TIMES, you are helping to sustain a journalism of relevance and ensuring it remains free and available to all.
Donate
TEXT AD: Call Willie – +2348098788999
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