Hotel operators in Nigeria have called for urgent government intervention to address multiple taxation, high operating costs and inadequate electricity supply, warning that the challenges are threatening investment, jobs and the sustainability of the hospitality industry.
The National Secretary of the Nigerian Hotels Association (NHA), Prince Amos Uyo, made the call while speaking on the hospitality and tourism sector on DOTT TV in Asaba, Delta State.
Uyo said hotels were already major contributors to employment and government revenue through taxes and levies at the federal, state and local government levels, but were being weighed down by what he described as excessive and duplicative charges from different government agencies.
According to him, hotel operators currently contend with more than 25 different taxes, levies, rates and regulatory charges, imposed by the three tiers of government and, in some cases, non-governmental organisations.
He listed some of the charges as Company Income Tax, Value Added Tax (VAT), Education Tax, NITDA Levy and Police Trust Fund Levy at the federal level, while state and local government charges include tourism levy, hotel occupancy tax, consumption tax, environmental levy, fire service charge, tenement rate, signage fee, waste disposal charges, liquor licence, health permits and other fees.
Uyo said the problem was not taxation itself but the duplication and lack of coordination among collecting agencies.
He said different government agencies often visited the same hotel to demand separate payments, while operators were sometimes subjected to threats of sealing their premises or arbitrary assessments when they were unable to meet the demands.
The NHA secretary called for the harmonisation of hospitality taxes through a single-window collection system, under which all legitimate taxes and levies payable by hotels would be collected through one platform and subsequently shared among the federal, state and local governments according to an agreed formula.
He also advocated a legal limit on the number of permissible levies imposed on hotels, proposing that only five major charges should remain: VAT, Company Income Tax, Tourism Levy, Tenement Rate and Waste Levy.
Uyo further called for the establishment of a National Tourism Tax Ombudsman to handle complaints from operators and check alleged harassment and illegal collections by government agencies.
He said government should also consider tax incentives, including a five-year tax holiday and single-digit interest loans for new hotel investments, arguing that such measures would encourage investment, expand employment and ultimately increase government revenue.
On electricity, Uyo said poor power supply remained another major burden for hotel operators, who are often forced to provide their own infrastructure and alternative sources of electricity.
He recalled that he personally spent more than N20 million to extend a commercial electricity line to his hotel, including the purchase of cables and a transformer, yet operators could still be required to pay distribution companies for electricity services connected to infrastructure they had substantially financed themselves.
He argued that the situation increased the cost of running hotels and was ultimately reflected in room rates and the prices of services offered to customers.
The NHA official warned that the rising cost of operations was also discouraging investment, with some investors considering taking new projects to countries such as South Africa and Rwanda, where he said access to public infrastructure and a more coordinated tax environment could make investment more attractive.
He said the impact went beyond the hotel industry, stressing that hospitality was closely linked to transportation, food production, entertainment, retail and other businesses.
“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,” he said.
The association, in its position paper, warned that the pressure on operators was already affecting employment and investment, claiming that more than 30 per cent of small hotels had closed or downsized in the past 24 months because of operating costs.
It also argued that excessive taxes could become counterproductive, as higher costs force hotels to increase room rates, reduce demand and potentially lower overall government revenue as businesses close or scale down.
The NHA therefore urged the National Assembly, particularly the Senate Committee on Tourism, to urgently sponsor legislation to harmonise hospitality taxes and establish a more predictable regulatory framework for the industry.
The association also called for mandatory consultation with hotel operators before the introduction of new levies, saying stakeholders should have a voice in policies directly affecting the sector.
Uyo said the hospitality industry was willing to pay legitimate taxes and contribute more to national development, but stressed that the current system needed to be streamlined to allow businesses to survive and grow.
He said a coordinated approach by the federal, state and local governments would not only reduce the burden on hotel operators but also stimulate investment, protect jobs, increase tourism activity and expand government revenue.
