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State Internal Revenue Service IGR Platform · SIRS

E-SERVICE · HOSPITALITY

Hotel occupancy and restaurant consumption tax

Five per cent of the bill, charged to the consumer and collected by the operator. Hotels, restaurants, bars, lounges and event centres are collection agents for this tax — the money is never theirs, and remitting it late is not a cash-flow decision.

Who pays and who collects

Consumption tax is borne by the consumer. When a guest settles a hotel bill, a diner pays for a meal, or a client hires an event centre, five per cent of the amount charged is consumption tax due to the State. The operator adds it to the bill, shows it as a separate line, collects it and holds it as an agent of the Service until the twentieth of the following month, when it must be remitted.

This is worth stating plainly because operators frequently treat consumption tax collected as part of their turnover, spend it, and then find themselves owing the Service money they no longer have. The tax is not part of the operator’s income and does not appear in the profit and loss account as revenue; it is a liability from the moment it is collected.

The tax applies to goods and services consumed in hotels, motels, guest houses, restaurants, fast food outlets, bars, lounges, nightclubs and event centres within the State — accommodation, food, drinks, hall hire, and services rendered as part of the visit. It does not apply to takeaway groceries from a supermarket, to a purely retail sale, or to services rendered outside the State.

Scope of the tax

Establishment What is taxable What is not Rate
Hotel, motel, guest house Room charge, food, drinks, laundry, business centre and other in-house services Refundable deposits; charges for services rendered off the premises 5%
Restaurant and fast food outlet Food and drinks consumed on or supplied from the premises, service charge Wholesale supplies to another business for resale 5%
Bar, lounge and nightclub Drinks, food, entrance and table charges Sale of sealed goods for consumption elsewhere 5%
Event centre and banquet hall Hall hire, catering, decoration and equipment supplied by the centre Services supplied and invoiced independently by a third party 5%
Catering service operating from a fixed base Food and drinks supplied at an event within the State Events catered outside the State 5%

Operator obligations, month by month

1

Register as a collection agent

Every qualifying establishment registers with the Service before it opens, and receives a consumption tax collection agent number in addition to its TIN.

2

Show the tax on every bill

The bill must show the charge, the five per cent consumption tax and the total as separate lines. A bill that buries the tax in the price is not compliant.

3

Keep the records

Sequentially numbered bills or an electronic point-of-sale record, retained for six years and available for inspection.

4

File the monthly return

By the 20th of the following month, declaring total taxable turnover and tax collected. Returns are filed on the portal and take a few minutes.

5

Remit

A payment reference is generated against revenue head 11020001. Remit through any accredited channel.

6

Display the certificate

The current collection agent certificate must be displayed at the entrance, where guests can see it. Guests should not pay consumption tax to an establishment without one.

What a compliant return contains

  • Collection agent number and TIN of the establishment.
  • The month to which the return relates.
  • Total taxable turnover for the month, by category — accommodation, food, drinks, hall hire, other.
  • Total consumption tax collected.
  • Any adjustment for cancelled bills or refunds, with supporting documentation.
  • The net amount remitted and the payment reference.
  • A declaration signed by the proprietor or an authorised officer.

Enforcement

Failure to remit attracts a penalty of ten per cent of the sum, plus interest, and the Service may seal the premises after thirty days of default on the written authority of the Executive Chairman.

Collecting consumption tax from guests and failing to remit it is a distinct and more serious matter than failing to collect it, and is referred to the Legal, Audit & Enforcement directorate for prosecution.

Operators are audited on a rolling cycle. The audit compares declared turnover against point-of-sale records, occupancy data, purchase records and bank lodgements.

For guests and operators

Is consumption tax the same as VAT?
No. VAT is a federal tax administered by the FIRS and charged across the economy at 7.5 per cent. Consumption tax is a State tax charged at 5 per cent only on consumption in hotels, restaurants and event centres in this State. Both may appear on the same bill, each on its own line.
A restaurant charged me consumption tax but has no certificate displayed. What should I do?
Ask for the collection agent number, keep the bill and report it through the whistleblower page. An establishment collecting tax without being registered is committing an offence and the money is not reaching the State.
Do small food vendors pay?
Establishments with annual turnover below the threshold set by the Board are exempt from collecting the tax, though they remain liable to income tax on their profits. The exemption is claimed on registration and reviewed annually.
We give a discount. Is tax on the gross or the discounted price?
On the amount actually charged to the guest after discount. Tax follows the money.
A guest disputes the charge. Can we waive it?
No. The operator has no power to waive a statutory charge. Where a bill is cancelled or refunded in full, the corresponding tax is adjusted on the monthly return with documentation.

File your monthly return

Due by the 20th. Filing takes a few minutes and the receipt is issued immediately.

Operator sign in Tax calendar