LIRS Urges All Lagos Residents to Submit Annual Tax Returns by March 31

Abideen Akande, the Special Adviser to the Executive Chairman of the Lagos State Internal Revenue Service (LIRS), has asserted that submitting annual tax returns is mandatory for all residents in Lagos State.

He outlined not only the reasons for this obligation but also the penalties for non-compliance, along with the broader goals of the tax reforms being implemented.

In a conversation with Helen Oji from Guardian Nigeria, Akande explained, "Filing tax returns enables the tax authority to ascertain your earnings from the previous year and to identify any tax payments made in advance. Nigeria follows a self-assessment tax system, which demands that individuals voluntarily declare their income over a specified period."

He elaborated further: "When individuals file their returns, they are required to report the income they earned in the prior year, as that period is concluded."

Akande highlighted the public's tendency to focus on rights while often overlooking their tax obligations: "While many discuss their constitutional rights, they tend to avoid mentioning their constitutional duties. Unlike the January filing requirement for employers, which is strictly governed by statutory provisions, individual filing is underpinned by both constitutional and legal mandates. This underscores its significance. In any structured society, a functioning tax system is essential. It is often said, ‘Aside from taxes, the only certainties are death and change.’ Thus, compliance with tax regulations is unavoidable."

He continued, "In Nigeria, we operate under a self-assessment framework. You need to state your earnings. If you've remitted some taxes in the previous financial year or if taxes were subtracted at source, you must inform the tax authorities. You can indicate: ‘I earned this much, and this amount was already deducted from my income.’ If you owe the State government any amount, you should proceed with payment."

Akande noted that taxpayers unable to pay their dues promptly could negotiate a payment plan with the tax authorities: "For instance, you might request to remit N3 now, then N3 next month, and N4 later. If the tax authority finds your financial constraints genuine, they could approve the plan. However, should they suspect any intent to evade payment, they may reject your request and pursue recovery through legal means."

He reiterated that filing tax returns is "not optional but essential." Akande stated, "Even if you assess that you owe nothing to the government, submission is still required. For instance, if your total income last year was below N840,000, corresponding to the minimum wage threshold, you wouldn't incur any tax obligations."

However, he stressed, "It is crucial to declare that your total income was N800,000 despite not having a tax liability. The government has established a threshold exempting lower-income earners from taxation; therefore, whilst your tax obligation may be zero, you must still inform the government of your earnings."

Regarding the submission of tax returns, Akande instructed: "Simply access the e-tax platform at e-tax.lirs.net. Enter your information, and the platform will guide you to the filing section, where you will list your income, expenses, and any taxes withheld. It’s important to note that ‘Form A’ is utilized for income declarations and relief claims."

He further explained, "When filing, you're reporting on the previous year's earnings. Since we are in 2026, you will disclose your income earned from January 1, 2025, to December 31, 2025. Include all income streams: salaries, side ventures, rent, and investment earnings like dividends."

"Dividends are usually taxed at the source, so the tax deducted is final. For example, if you receive N100,000 in dividends from BUA Cement, the company will have already deducted the applicable tax before payment. Thus, while you must report this income, it will not be taxed again."

He emphasized that this reporting aids the tax authority in comprehending the overall economic activities within the state, significantly contributing to the assessment of Lagos State's Gross Domestic Product (GDP), alongside household economic activities.

Akande noted that the tax filing window opens on January 1 and closes on March 31 each year.

Regarding penalties for non-compliance, he highlighted, "Under the new regulations, individuals who neglect or refuse to file or knowingly submit false or incomplete returns face administrative penalties. The initial penalty is N100,000 for the first month of non-compliance, and N50,000 for each subsequent month until the matter is resolved. Considering that N100,000 could cover annual internet expenses, ensuring compliance is substantially more prudent than accruing penalties."