By Tolani Kolawole
Lagos, Nigeria — The Lagos State Internal Revenue Service (LIRS) has reminded residents of the state that filing annual tax returns is compulsory for all income earners, urging taxpayers to submit their returns before the March 31 deadline to avoid penalties.
Special Adviser to the Executive Chairman of LIRS, Abideen Akande, stated that the requirement is part of Nigeria’s self-assessment tax system, which allows individuals to voluntarily declare their income earned in the preceding year and determine the amount of tax payable.
According to Akande, the annual tax filing system enables tax authorities to determine how much residents earned in the previous year and what taxes have already been paid or deducted at source.
“In an organised society, taxation is inevitable. While many people talk about constitutional rights, fewer acknowledge constitutional obligations. Filing tax returns is one of such obligations that citizens must fulfil,” he said.
He explained that the assessment period now aligns with the calendar year—from January to December—meaning that individuals are required to file returns for income earned between January 1 and December 31 of the previous year.
Akande clarified that filing tax returns is mandatory for all residents, including those whose income falls below the taxable threshold. He noted that even individuals earning less than the minimum taxable income must still file their returns to declare their earnings.
“For example, if someone earned about N800,000 in a year, which is below the taxable threshold, the person will not pay tax. However, the individual is still expected to declare that income,” he said.
To make compliance easier, the LIRS has fully digitised the tax filing process. Residents are expected to file their returns through the agency’s electronic tax platform.
“The process is now completely online. Taxpayers simply log on to the e-tax platform, fill in their details and declare their income, deductions and taxes already paid,” Akande explained.
He added that statutory reliefs are available to taxpayers, including deductions for pension contributions, health insurance, National Housing Fund contributions, life insurance premiums and mortgage interest payments.
The LIRS adviser also noted that income from multiple sources must be declared. These include salaries, side businesses, rental income and investment returns such as dividends, although dividends already taxed at source will not be taxed again.
Akande explained that the filing window opens from January 1 each year and closes on March 31, urging residents not to wait until the last minute to comply.
“Once you know your income for the year, usually by mid-January, you should go ahead and file. Waiting until March creates unnecessary pressure on the system,” he said.
Addressing concerns about multiple taxation, Akande said data analysis from about 1.5 million taxpayers in Lagos showed that most residents would either pay less tax or none at all under the current tax regime.
He revealed that about 54.7 per cent of taxpayers are expected to pay zero tax, 43.7 per cent will pay less tax than before, while only about 1.6 per cent will pay more.
He added that the reform was designed to ease the financial burden on low-income earners while improving transparency in tax administration.
Akande further advised individuals in the informal sector to file their tax returns, noting that failure to do so could result in presumptive tax assessments by tax authorities.
“If someone declares a turnover of N3 million and their income falls below the taxable threshold, they may pay zero tax. But if they refuse to file, tax officers may impose a presumptive tax of one per cent of the estimated turnover,” he said.
He warned that failure to file tax returns attracts stiff penalties under the law.
“A taxable person who fails to file returns or submits inaccurate information is liable to a penalty of N100,000 for the first month of default and N50,000 for each subsequent month until compliance is achieved,” Akande stated.
He therefore urged all Lagos residents who earn income to take advantage of the electronic filing system and submit their returns before the March 31 deadline.
