Lagos State Internal Revenue Service Mandates Annual Tax Returns Filing by March 31
The Lagos State Internal Revenue Service (LIRS) has issued a firm directive requiring every resident of Lagos to file their annual tax returns before the March 31 deadline. This announcement was made by Abideen Akande, the Special Adviser to the Executive Chairman of LIRS, during an interview with Helen Oji for Guardian Nigeria.
Why Filing Tax Returns is Compulsory for All Residents
Akande emphasized that filing annual tax returns is not an optional activity but a constitutional and legal obligation for every individual residing in Lagos. He explained that Nigeria operates a self-assessment tax system, which means taxpayers must voluntarily declare their income for the preceding year.
"Filing of returns allows the tax authority to know how much you have earned in the preceding year and how much tax, if any, you have already paid in advance," Akande stated. "This process is crucial because it helps the government understand the full scope of economic activity in Lagos State, contributing to accurate Gross Domestic Product (GDP) measurements that include household economic activities."
He further noted that while people often focus on their constitutional rights, they should not shy away from their constitutional obligations. "In any organized society, you must have a tax system. As the saying goes, 'aside from taxes, the only other certainties are death and change.' So, tax compliance is inevitable," Akande added.
Detailed Process for Filing Tax Returns
Akande provided clear instructions on how Lagos residents can file their tax returns:
- The filing window opens on January 1 and closes on March 31 each year.
- Residents must file returns for income earned from January 1 to December 31 of the previous year. For 2026 filings, this means declaring income from January 1, 2025, to December 31, 2025.
- All income sources must be disclosed, including:
- Salary income
- Side business earnings
- Rental income
- Investment income such as dividends
- The filing is done through the e-tax platform at e-tax.lirs.net, where users input their details and are guided through the filing process.
- Taxpayers complete Form A, which is a declaration of income and claim for reliefs.
Akande clarified that even income that has already been taxed at source, such as dividends from companies like BUA Cement, must still be declared. "You still declare the income, but it will not be taxed again," he explained.
Special Considerations and Payment Options
The LIRS official addressed several important scenarios that taxpayers might encounter:
For those with income below the taxable threshold: Even if your annual income is below N840,000 (approximately the annual equivalent of the minimum wage threshold), you must still file a return declaring your income. In such cases, your tax liability would be zero, but the declaration is mandatory.
For those who owe additional tax: If after declaring your income you discover you owe additional tax, even as little as N5 or N10, you must pay it promptly.
Payment plan options: For taxpayers facing genuine financial challenges, Akande revealed that they can approach the tax authorities to request a payment plan. "If the tax authority is satisfied that you are genuinely facing financial challenges, it may approve the arrangement. But if it believes you are simply trying to evade payment, it may decline your request and proceed to recover the money using legal provisions," he cautioned.
Significant Penalties for Non-Compliance
Akande outlined substantial penalties for those who fail to comply with the tax filing requirements:
- A taxable person who fails or refuses to file returns, or knowingly submits incomplete or inaccurate returns, is liable to an administrative penalty.
- The penalty is N100,000 for the first month of default.
- For each subsequent month of non-compliance, an additional penalty of N50,000 applies until compliance is achieved.
"N100,000 can buy your internet data for an entire year. So, it makes more sense to comply than to pay such penalties," Akande emphasized, putting the penalty amount in perspective for Lagos residents.
The Broader Impact of Tax Compliance
Beyond individual obligations, Akande highlighted how proper tax filing contributes to the broader economic health of Lagos State. The data collected through tax returns helps the government:
- Measure economic activity accurately
- Plan infrastructure development
- Allocate resources effectively
- Understand household economic patterns
- Develop policies that support economic growth
The LIRS continues to emphasize that tax compliance is not just about revenue collection but about building a sustainable economic system that benefits all Lagos residents through improved public services and infrastructure development.
