This New Year, save some money by eating at home

By Iheanyi Nwachukwu
Although many people are addicted to visiting hotels and restaurants, particularly during festivities, with the view that these places provide the best of time-out,  there is economic cost to such addiction.
Why? This is because you are indirectly expending additional money which you would have used for something else when you frequently visit hotels, restaurants and also make use of event centres like in the urban areas.
For instance, in Lagos State where five percent consumption tax is being levied on hotel, restaurant and event centre, it is very simple as the elementary economics will apply–the  multiplier effect –when the owners of these outfits simply transfer the tax burden to visitors in those places regularly.
It is worth reminding you that the Lagos State consumption tax reflects a conscious attempt to take more from a segment of the society which patronise hotels, restaurants and event centres.
The tax simple means five percent extra on cost of goods and services in these establishments.
It means that the frequent visit or use of such places adds additional expenses to your existing ones, a situation which you could have solved when you limit how you patronise those places, thereby saving related amount in your purse.
For instance, a bottle of Guinness Stout (small) costs N500 in places like Lagos Airport Hotel and Sheraton Hotel. At that rate, it means that operators of the hotel must have factored into such product, the additional percentage in consumption tax. On the contrary, it means you can save some money for yourself while consuming same product by patronising relatively small but decent leisure spots which are not included in the consumption tax; if worst, take such buy and take such drinks at home while also enjoying the season.
According to Simon Olawuyi, a tax expert, “to me the 5 percent consumption tax in Lagos is very much avoidable as long as you have nothing to do with those places that are being taxed by the state. It is a matter of self discipline and the need to be rational in expenses by avoiding such places if possible.”
Admittedly, the tax tends towards a wealth tax, even though its proceeds will be used for communal benefits and ultimately the enhancement of tourism and economic development. “Although we have achieved an appreciable degree of stability with this tax, its full potentials are still being hampered by the jurisdictional confusion created by the enactment of the Value Added Tax (VAT) decree in 1993,” said Ade Ipaye, former special assistant to the governor of Lagos State on Taxation and Revenue, who is now the Attorney General and Commissioner of Justice in Lagos State.
 Source http://www.businessdayonline.com