The Transcorps Hilton Tax Precedent

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EDIFYING ELUCIDATIONS BY OKEY IKECHUKWU

There is now a Pay-As-You-Stay Tax at Transcorps Hilton Hotel, Abuja Nigeria. It came into force some months back. Every vehicle that drives into the hotel premises gets an entry receipt, or ticket, at the gate, which signs it up for a charge of two hundred Naira for every hour it is parked. The charges apply 24 hours, daily; Monday through Friday. Only Saturdays and Sundays are exempt. There are also overnight charges and penalty for lost parking tickets.

The good news, though, is that the parking charges do not apply to all registered hotel guests, Hiltonia members and restaurant and bar guests. But terms and conditions apply to Hiltonia members and bar and restaurant guests. Hiltonia members must have valid membership, while restaurant and bar guest must spend not less than four thousand Naira at a sitting, to qualify for exemption. Anyone who spends less than four thousand Naira at a single sitting in the bar, or restaurant, must pay the parking fees of two hundred Naira per hour. The issue here may be more of when it became the norm for the Hilton brand to impose such charges within its own grounds anywhere in the world, than what has suddenly made this charge advisable, or necessary, in Abuja.

Because the city of London is one of the most landless urban centres in the world, the Hilton Paddington, Metropole and Park lane in the UK have practically no parking spaces of their own. So whoever in parking in the nearby public space knows that he is doing so, with public charging metres in place for his payments. Not so for any other Hilton I know of in the US, Ethiopia, Egypt, (landless) Dubai, etc. so why should anyone who enters the Hilton in Abuja, with a still developing hospitality industry, pay for parking a vehicle in the sprawling premises? Why should a customer who walks into the Piano Lounge of the hotel for the regular one thousand two hundred Naira cup of coffee now pay nearly 20% surcharge if he drinks his coffee within an hour, but fails to spend up to four thousand Naira on that particular occasion. Yes, no one should start screaming for help, or getting all neurotic and hysterical, that he is about to be dragged off to the Hilton, kicking and screaming, to have an expensive cup of coffee inflicted on him at gun point. We are still in a democracy, despite vaulting evidence suggesting the contrary.

So our concern and complaint here is not about the price of the Transcorps Hilton cappuccino. Every serious hotel of equivalent standing as anywhere in the world charges more or less the same amount. The price of a small bottle of water at the Sheraton Hotels and Towers Abuja, five minutes away from the Hilton, is higher than the cost of twelve bottles of the same bottle of water in the open market. These, and similar, hotels are not local village markets, so let us maintain perspectives here; thank you. Everyone is free to go drink his coffee elsewhere, Starbucks and all without let or hindrance. We all have the option, which I believe my good friend Reuben Abati will approve, of buying ourselves a small tin of Nescafe or a large, exotic brand of coffee for that matter. That is what most sensible coffee lovers would do; which should give them enough coffee to drink for a week or more.

But the moment you set out with your two legs to go drink coffee at the type of location under reference here, you are the one who has agreed in principle to pay the rate charged by the hotel for a very tiny cup of coffee. You cannot then later turn around to say that the hotel cleaned you out. You also cannot subsequently call the police on this matter and ask for a refund. The terms of the contract were quite simple: He who comes in here, requests for a cup of coffee as advertised on the menu and is served, is liable for the charges pertaining thereto. The only complication I see here, which complication was not there about a year ago, is that you now have to pay further tax to the hotel, depending on how long it took you to drink your coffee. Just like that! The longer you stay the more you pay.

This is clearly a no-win situation for the coffee lover who ventures into the Abuja Hilton to assuage his thirst for coffee, for the following simple reasons. The processes, and administrative logistics, leading up to the drinking of cappuccino at the Hilton are primed for not-extremely-fast delivery. Check this out: (1) First, you order the coffee and the waiter takes the order to the ‘back office’ for processing; (2) Second, your drink will not come immediately, because the waiter must document your order and move on to other next steps; (3) Third, an average of five to twenty minutes is sometimes lost to earlier orders, while waiting; (4) Fourth, drinking the coffee takes some time; (5) Fifth, you spend even more time at the table if you ordered some small chops as well; (6) Sixth, the longer it takes to conclude the coffee procurement, processing and drinking business, the more you are likely to pay for doing so. You must stop over at the Front Desk to pay for whatever must have accumulated as parking charges while you were drinking your coffee if you could not guzzle up some four thousand Naira over a conversation.

If people have to pay a standard parking charge at the rate of two hundred Naira per hour in a hotel like Transcorps Hilton, why should other hotels, supermarkets, cinema houses, etc. not follow the Transcorps Hilton example and do the same? As this standard rate of two hundred Naira per hour enables the hotel rake in a minimum of nearly 20% extra for the purchase of a cup of coffee on which the customer has already paid Value Added Tax (VAT), what type of tax is this to be called? What do we call the hundreds of millions the hotel has been raking in every month, since the parking charges came into force? Is this right? Do we call it Land Use Rent? Perhaps it is some kind of special tax imposed by the area boys, or Omo n’iles, of the area? What is the position of the Federal Inland Revenue Service (FIRS) on this? Is Silverbird Cinema, for instance, at liberty to charge its customers for parking; just like that? True, such charges exist in one or two public spaces, but the public should be advised on the legality and propriety of it all.

Anyone who would like to argue that a customer who had just patronized the hotel should not be made to pay for parking, will need a receipt to prove it. But, wait for this, your receipt will not save you from the parking charges if you have not spent up to four thousand Naira at one sitting. The Front Desk will politely tell you, upon enquiry, that only those who spend a minimum of four thousand Naira while in the hotel at any particular time are entitled to such reprieve. Thus you must pay your two hundred Naira. And that is even if your parking stay lasted for only 60 minutes or less. You will pay four hundred Naira if it is 61 minutes, or more – up to 120 minutes. Now, go tell your mummy!

The only way you can escape the extra charge on your cappuccino, for instance, is if you can order it, get it and drink it up within an hour. That means parking your car, if you are driving yourself, entering the hotel, ordering your coffee, bolting the drink and leaving the hotel premises within twenty minutes. Since no one can actually do that, not even with a driver waiting, you are stuck. You cannot take a coffee at the Hilton without this charge, you cannot demand or get an explanation for the strange practice and you are forced to accept the questionable practice. You are miffed of course, more because of the practice and the possible impunity behind it, rather than the amount paid. You are constrained to wonder about the propriety, or lack of it, in the matter and whether we are, perhaps, heading towards a situation where anyone, or any organization, can cordon off part of some space and charge access fees for it. You are forced to contemplate the possibility that Transcorps Hilton is trying (at a corporate level) the antics of many marauding groups that now quarantine and tax communities they are able to hold at their mercy all over the country. You are forced to wonder whether it no longer matters that the very nature of its business obliges Transcorps Hilton to provide contiguous free space for the concomitant human traffic.

I recall discussing this development at the Hilton with Dr Sam Amadi, former Chairman of the National Electricity Regulatory Commission (NERC) some months ago. This was after our joint appearance at a programme in the studios of Arise Television located at the Hilton. As we paid our parking charges, we both wondered whether the Consumer Protection Council was aware of this strange practice. Wuse market and public parks may collect tolls certainly, but Transcorps Hilton? We wondered whether Transcorps Hilton was allowed by law to charge customers for parking their cars and what the terms and circumstances of such authorization might be. Above all, we wondered how many hotels do not default in VAT remittance and why fleecing the public in a fundamentally tax-unfriendly clime like hours should be made to seem attractive. The Transcorps Hilton precedent of imposing parking charges is not heartwarming. The Consumer Protection Council may wish to look into the matter, even if a loophole in the law allows it.

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