Lagos Warns Residents: File Your Personal Income Tax Before March 31 or Risk N100,000 Penalty
- Lagos residents must file personal income tax returns by March 31 to avoid heavy penalties
- Tax returns are compulsory for all income earners, even if no tax is owed
- The Lagos State Government has fully digitised the tax filing process for residents
Pascal Oparada is a journalist with Legit.ng, covering technology, energy, stocks, investment, and the economy for over a decade.
The Lagos State Government has urged residents who earn income within the state to file their annual personal income tax returns before the March 31 deadline, warning that failure to comply could attract heavy penalties.
The Special Adviser to the Executive Chairman of the Lagos State Internal Revenue Service (LIRS), Abideen Akande, explained that filing tax returns is not optional but a legal obligation required under both constitutional provisions and statutory laws.
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Speaking in an interview, Akande said the process allows tax authorities to assess an individual’s income, determine tax liabilities, and maintain transparency within the state’s tax system.
Why is filing tax returns mandatory
According to Akande, Nigeria operates a self-assessment tax system, which means individuals are expected to voluntarily declare their income for a given year.
He explained that the assessment period now aligns with the calendar year, covering income earned between January and December. Residents filing in 2026, for example, are expected to declare all income earned between January 1 and December 31, 2025.
“Filing returns allows the tax authority to know how much you earned and how much tax you have already paid,” he said.
He stressed that many people speak about constitutional rights but often ignore constitutional obligations, noting that paying and declaring taxes is essential for any organised society, according to a report by The Guardian.
Everyone must file — even if you owe nothing
Akande emphasised that every resident earning income in Lagos must file a tax return, even if they believe they owe no tax.
For instance, individuals earning below the taxable threshold of about N840,000 annually may not be required to pay tax, but they must still declare their income.
“The government has deliberately placed a threshold below which the poor are not taxed,” he said. “Your tax liability may be zero, but you still need to inform the government of what you earned.”
Lagos moves fully to digital tax filing
To make the process easier for residents, the state has fully digitised tax filing through the LIRS e-tax platform.
Akande noted that the tax filing system has evolved significantly over the years. Earlier paper forms used for filing were lengthy and complicated, sometimes spanning six pages. Over time, the forms were simplified and eventually moved online.
Today, residents can complete their filings electronically through the official portal managed by Lagos State Internal Revenue Service.
The online system guides users through the process of declaring income, claiming allowable deductions and confirming taxes already deducted from their earnings.
Reliefs and deductions available to taxpayers
The tax system also provides several reliefs aimed at reducing the burden on taxpayers.
Akande listed pension contributions, health insurance payments, and contributions to the National Housing Fund as tax-exempt deductions.
Mortgage interest payments and life insurance premiums can also qualify for reliefs under the law.
However, taxpayers cannot claim mortgage interest relief and rent relief simultaneously.
Under the revised rules, tenants may claim rent relief capped at N500,000 or 20 per cent of their gross income, whichever is lower.
Deadline and advice to residents
The tax filing window opens every year on January 1 and closes on March 31.
Akande warned that many residents delay filing until the last moment, which can cause system congestion.
He advised taxpayers to file their returns early once they have calculated their income for the year.
“Once you know your income, usually by mid-January, you should go ahead and file. There is no need to wait until March,” he said.
What happens if you don’t file
Failure to file tax returns attracts stiff penalties under the law.
Akande revealed that defaulters face an administrative fine of N100,000 for the first month of default and N50,000 for every additional month until they comply.
He also noted that individuals who refuse to file may be subjected to presumptive tax assessments, where authorities estimate their income and charge tax accordingly.
In some cases, this could lead to taxpayers paying more than they would have if they had filed voluntarily.
Source: UGC
For example, a business owner who declares their income may end up paying zero tax if it falls below the taxable threshold, while someone who refuses to file could be assessed 1 per cent of their estimated turnover.
Akande therefore encouraged residents, including those in the informal sector, to file their returns promptly to avoid penalties and protect their financial interests.
12 things employers must know as PAYE filing deadline nears
Legit.ng earlier reported that as the deadline for filing annual Pay-As-You-Earn (PAYE) returns approaches, employers across Nigeria are under renewed pressure to comply with the country’s updated tax framework.
January has once again emerged as a critical compliance month, particularly under the newly introduced tax reforms that reshape personal income tax administration.
Speaking during a media briefing, Tokunbo Akande, special adviser to the executive chairman of the Lagos State Internal Revenue Service (LIRS), clarified filing obligations, addressed concerns over penalties and Tax Identification Numbers, and dispelled widespread misconceptions about the new regime.
Source: Legit.ng
