FIC Report (Lagos State) – Lagos State has implemented several changes to revamp the existing income-tax regime with key objectives of simplification of language, ease of compliance, and scrapping of obsolete provisions.
The state plans to generate more than two- thirds of its 3.366 trillion naira 2025 budget through internally generated revenue (IGR).
Deputy Director, Information and Communication Technology (ICT), Lagos State Internal Revenue Service (LIRS), Dr. Rasheed Olu- Ajayi, said the goal of increasing digitization of the state’s tax system is to make the process concise, clear, easy to understand, less in disputes and with greater tax certainty to taxpayers.
To this end, there have been comprehensive reviews of the tax regime following stakeholder’s inputs. He gave a brief overview of what employers filing of annual tax returns involved. “They are expected to have been pre- registered on the Enterprise Tax Administration System, where they would have had their payer ID as the log in username, and they would have had a corresponding password. This involves both individuals and corporate entities. So once they have those requirements, they’re able to log in to the Enterprise Tax Administration System, when in, they’ll navigate to the annual returns filing system. And from there, they’ll be able to upload their schedule of their withholding taxes. They’re projections for the year and their annual returns for the year. The templates are quite there and explicit so no one can miss that. Once that information is uploaded into the system, the tax can be computed”.
He also emphasized the need for employers to file their tax return with your agency with the service on time.
He said “it’s a regulatory requirement; it’s a statutory requirement which is the Federal Government Act, Personal Income Tax Act 2011 as amended, where all employers of labor and individuals are expected to file their returns from the first of January of every year of 31st of January of that same year. So not doing so will be acting against the law and there is a penalty for not complying with such.
“So that’s why it is imperative for everyone to file their returns within this window. For corporate entities, it is generally from the first of January to 31st of January. For individuals, it is from the first of January to 31st of March”.
He further spoke on measures put in place to simplify the process for taxpayers.
He noted that there are new things in place in the Enterprise Tax Administration System with several modules added to the application which may not necessarily be in line with the annual returns filing system.
“The Enterprise Tax Administration System has been fully developed. The application is continuously being improved on a daily basis. So in the last few months, we’ve added things such as the Geographic Information System (GIS), Adequacy Returns on it. As of last year, people can now apply for tax clearance online, which was never possible. So, a lot of new innovations have been added to the system.
Signed
Kareem Zainab Ibiyemi
Senior Information Officer