Nigeria Tourism; now over-regulated, over-taxed

Posted: June 26, 2017 in general
Tags: , ,

By VICTOR NZESavedPicture-20161218205728.jpg

Stakeholders in the travel and tourism industry of the country have continued to register their displeasure over moves by the National Institute for Hospitality and Tourism (NIHOTOUR) to push through a bill presently before the National Assembly which seeks to confer on it the sole authority to regulate the industry.

This is also as experts have advised the federal lawmakers not to duplicate laws governing the industry, but address challenges bedeviling the sector by way of clarifying on existing constitutional provisions guiding the operations of various agencies in the tourism industry, instead of looking to create fresh ones.

Tagged the; ‘Bill for an Act to Provide for the Establishment of the National Institute for Hospitality and Tourism for Training of Personnel and Regulation of Professional Personnel Practices and Services of Hospitality and Tourism Activities in Nigeria and other related matters,’ the document seeks to effectively extend the control of the institute in industry practice.

The proposed NIHOTOUR Bill which came up for Public hearing, June 15, has continued to generate contempt within the tourism industry in the country as stakeholders flay the move by NIHOTOUR to establish itself as apex regulatory and registration body for tourism establishments across the country.

It would be recalled that in January 2011, former Director General of the Nigerian Tourism Development Corporation (NTDC), Otunba Segun Runsewe, said at a stakeholders’ meeting organized by the corporation in Lagos, under the theme of; ‘Tourism and National Security,’ that the corporation remains the apex tourism body ‘empowered by law to regulate, coordinate, and harmonize all tourism activities in Nigeria’.

“Section 1, Sub-Section 3 of the bye-law provides that no person shall operate a hospitality or Tourism establishment unless he has obtained and in possession of a current certificate of registration from the Corporation. It becomes illegal for anybody or group to operate any form of tourism establishment without duly registering with the NTDC,” said Runsewe.

He said the Hospitality and Tourism Establishment (Registration, Grading, and Classification) regulation bye-law enacted by the Federal Government in 1997, Section 1, Sub-Section 3 of that bye-law provides that no person shall operate a hospitality or Tourism establishment without the approval of the NTDC.

However, the Supreme Court in its ruling of 19 July 2013 validated both the Hotel Licensing Law of Lagos State (as amended) and the Hotel Occupancy and Restaurant Consumption Law of Lagos State, while the offending sections of the Nigerian Tourism Development Corporation (NTDC) Act was rendered null and void.

The Supreme Court in dismissing the case filed by the Attorney General of the Federation (AGF) and upholding the contention of the Attorney General (AG) of Lagos State Mr. Ade Ipaye, held that the Constitution of the Federal Republic of Nigeria, (CFRN) 1999 as amended, only empowers the National Assembly (NASS) to regulate tourist traffic, a term which does not extend to hotel registration or licensing.

It was the view of the Supreme Court that the NTDC Act went beyond its powers as stated in the Exclusive Legislative List of the Constitution which is to regulate “tourist traffic”. This effectively challenged the constitutionality of the NTDC’s powers to unilaterally regulate and control of hotels and tourism in Nigeria. The court therefore validated the respective laws of Lagos State.

In validating the position of Lagos State to regulate its tourism establishments, the Supreme Court ruling also paved the way for other states like Cross River, Akwa Ibom, including the Federal Capital Territory (FCT) to lay siege to hospitality and leisure establishments and extort all manner of fees, levies and taxes such that the local councils in each of these states delved in to explore these business firms for their IGRs.

Though the laws setting up the NTDC were promulgated during the military era specifically the Decree 81 of 1992 which empowers the NTDC to regulate, grade and standardize hotel operations, however, the Supreme Court ruling of 2013 apart from effectively stripping hotel regulations off the corporation, it has also inadvertently exposed the incapability of states to adequately ensure best practices and standards in the hotel industry.

The Nigerian hospitality sub-sector is currently faced with an avalanche of taxes like the : 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 and Health Certificate.

Other taxes include; the Visual Advert, Waste Disposal, Bill Board, Sign Post, Operation Permit, Vehicle Emission Fee, Contravention Charges, Business Premises, Administrative Charges for Environmental, Audit, Copyright Society of Nigeria (COSON), water supply, electricity supply, copious levies by the local government councils, as well as other fees charged by regulatory agencies across the sectors at the state and federal levels.

“The reality is that the current burden of taxes and levies is heavy, especially when situated within the context of the high operating cost for business. The sector wants to be very clear and certain of its tax obligations, the number of taxes, the rates, period of payment, mode of payment and so on; a tax system that is devoid of arbitrariness and not driven by the whims and caprices of state officials,” said former President of the Hotel Owners Forum of Abuja (HOFA), Engr. Onofiok Ekong, who added that “the local governments are the main culprits here as these taxes have by extension pushed the sector to the brink.”

Many in the industry, therefore, see the proposed NIHOTOUR Bill as adding to the controversy, with the National Assembly attempting to shoot itself in the foot by moving to enact another controversial law rather than address the constitutional challenge thrown up by the Supreme Court.

In condemning the proposed NIHOTOUR bill, NTDC Director-General, Mr Folorunsho Folarin-Coker, opined that NIHOTOUR would be going beyond the mandate for which it was established if the bill is passed into law by the National Assembly.

Insisting that the institute was established, principally, as a training institute for personnel and stakeholders in the tourism and hospitality industry, Folarin-Coker said: “The bill will be giving NIHOTOUR the position of both a trainer and a regulator of everything relating to tourism; thereby disregarding the legality of other parastatal agencies.’’

According to him, the country’s tertiary institutions should be allowed to establish departments that would train personnel in tourism, adding that by encouraging several tertiary institutions to be part of it, this would enhance the ease of doing business as enunciated by Acting President Yemi Osinbajo recently.

Also, the National President, National Association of Nigeria Travel Agencies (NANTA), Mr Bankole Bernard, said NIHOTOUR had no statutory power to regulate tourism affairs in Nigeria, just as he insisted that NIHOTOUR would even do well as a directorate under NTDC.

“This is a bill that cannot see the light of the day because NIHOTOUR has no capacity to regulate the huge tourism industry. We should have NIHOTOUR as a directorate under NTDC,’’ he said.

Travel and writers under the aegis of the Association of Nigerian Journalists and Editors of Tourism (ANJET), also an affiliate of the Federation of Tourism Associations of Nigeria (FTAN) said NIHOTOUR has completely gone beyond its brief and what is expected of it, described the proposed bill as “death knell of hospitality and tourism”.

The tourism writers, who joined other stakeholders from travel agents, tour operators, park and leisure services providers, in blasting the document, maintained that the proposed bill further compounds the precarious situation of tourism regulation in the country, as the agency itself should rather be seeking to grow its capacity in the field of training of industry practitioners.

“If it is a training institute then it should restrict itself to that regardless of the NOC/NOS/NBTE provisions. What it is seeking to be with the full provisions of this bill is become omnibus body and ombudsman of tourism, which should not be,” ANJET said.

Also reacting, the Nigerian Association of Tour Operators (NATOP) said; “the proposed bill is an attempt to corner and colonize Nigeria Tourism by a training school and should be discouraged wondering why an institute wants to overreach itself”.

Similarly, a hospitality expert and scholar, Dr Wasiu Babalola, called for the outright rejection of the proposed NIHOTOUR bill by the National Assembly.

The outgoing Managing Director – West Africa, Swiss International Hotels and incumbent Honorary Secretary, Institute of Hospitality UK in Nigeria said: “The bill should be rejected for the agency aiming beyond its mandate. Why should it try to define who a professional is?

“When did government start deciding who should be president / chairman of council of professional bodies? Why should the agency want to take over the powers of NUC and NBTE? The proposers of the bill are surely ill-informed”.

NIHOTOUR, an agency in the Ministry of Culture and Information, with two campuses in Lagos and Osogbo, in Osun State, has for some time come under heavy fire, as industry watchers insist the agency has been undergoing challenges in its statutory role as a training institute established to boost capacity in the industry.

Established in 1987 following an agreement signed by the Federal Government, the United Nations Development Programme (UNDP) and the International Labour Organisation (ILO), the Federal Government had to ensure that NIHOTOUR started its training activities in 1988.

The institute was a department and the training wing of the Nigerian Tourism Development Corporation before it gained autonomy in 1998. Thereafter, the mandate of the institute was widened to provide technical skills and vocational manpower need for hotel, catering, and tourism workforce in Nigeria.


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