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.
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.
Key Highlights
- NHA says hotel operators currently pay more than 25 different taxes, levies and regulatory charges.
- The association wants a single-window tax collection system for the hospitality sector.
- NHA proposes limiting hotels to five major charges: VAT, company income tax, tourism levy, tenement rate and waste levy.
- The association calls for a National Tourism Tax Ombudsman to check alleged harassment by agencies.
- Uyo says poor power supply forces hotels to fund their own electricity infrastructure.
- He warns that rising operating costs are pushing some investors toward countries like South Africa and Rwanda.
Hotels Face Over 25 Taxes and Levies
Uyo said hotels were 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.
At the state and local government levels, he listed the charges to 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.
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NHA Calls for Single-Window Tax System
Uyo said the problem is not taxation itself, but the duplication and lack of coordination among the collecting agencies.
He said different government agencies often visit 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.
Poor Power Supply Adds to Operating Costs
On electricity, Uyo said poor power supply remains 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 increases the cost of running hotels and is ultimately, reflected in room rates and the prices of services offered to customers.
Rising Costs Threaten Investment
The NHA official warned that the rising cost of operations is 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 goes beyond the hotel industry, stressing that hospitality was closely linked to transportation, food production, entertainment, retail and other businesses.
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