Firm Advocates Tax Concession for Hospitality Businesses
The Managing Director of Jumia hotel and flight services, Omolara Adagunodo, has called on the federal government to as a matter of urgency, grant tax holidays to businesses in the hospitality industry.
This, according to Adagunodo, would strengthen operators in the sector.
Adagunodo who stated this in Lagos recently, hinged the call on the fact that the hospitality industry would contribute more than it is currently to Nigeria’s Gross Domestic Product (GDP) and the economy if it is granted tax breaks.
In 2017, the federal government released a list of 27 companies to benefit from tax breaks under pioneer status and the hospitality sector was missing.
Considering the challenges faced by industry players in hospitality businesses since 2017, when the list of beneficiaries of tax breaks was released, Adagunodo urged the federal government to include the hospitality sector in the pioneer status so that the sector could also enjoy its many benefits.
The hospitality sub-sector is currently faced with an avalanche of taxes ranging from Registration of Hospitality Premises, Stamp Duty, Nigerian Social Insurance Trust Fund (NSIT), Industrial Training Fund [ITF] National Pension Commission (PENCOM), Nigerian Tourism Development Corporation (NTDC), Value Added Tax (VAT), Pay As You Earn (PAYE), Company Income Tax, Withholding Tax, Liquor License, Food Handlers, to Health Certificate among others.
According to Adagunodo, “The travel and Tourism sector accounted for 1.9 per cent of total GDP as a direct contribution, and 5.1 per cent as a total contribution to GDP in 2017. In monetary terms, Travel and Tourism contributed N2.298 billion to the GDP as a direct contribution and N6.205 billion as a total contribution to the GDP.
“For jobs, the sector directly generated 1.2 million jobs, that’s 1.8 per cent of total employment, which showed a rise by 4.7 per cent in 2018 to 1.276 million. Whereas total jobs created – both direct and indirect was 3.3 million, which is 4.8 per cent of total employment.”
This percentage GDP contribution will significantly increase as these businesses will invest the money on boosting service delivery and overall improvement in the quality of business, she added.