The Lagos State Internal Revenue Service (LIRS) has reminded residents of Lagos that filing annual tax returns is compulsory, warning that individuals who fail to comply before the March 31 deadline risk significant penalties.
Abideen Akande, Special Adviser to the Executive Chairman of LIRS, explained that the requirement is part of Nigeria’s self-assessment tax system, which obliges individuals to voluntarily declare their income for a given financial year.
Speaking in an interview with Guardian Nigeria, Akande said filing tax returns enables authorities to determine how much individuals earned in the preceding year and whether the appropriate tax has been paid.
“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,” he said.
According to him, Nigeria’s tax structure places responsibility on taxpayers to disclose their income and indicate any deductions already made at source. Where a taxpayer still owes the government after such deductions, the individual is expected to settle the balance.
Akande noted that taxpayers who are unable to pay immediately can approach the tax authority to request a payment plan, provided they can demonstrate genuine financial difficulty.
He stressed that filing tax returns is mandatory for all residents, even for individuals who believe they are not liable to pay tax.
“Even if by your own assessment you believe you do not owe the government any money, you are still expected to file,” he said.
Akande explained that individuals whose annual income falls below ₦840,000 — roughly the yearly equivalent of the minimum wage threshold — may not have any tax liability. However, they must still declare their earnings to the government.
He added that the tax returns being filed this year cover income earned between January 1 and December 31, 2025. Taxpayers are expected to disclose all sources of income, including salaries, side businesses, rental earnings and investment income such as dividends.
According to him, dividends are typically taxed at source, meaning companies deduct the applicable tax before paying investors. Such income must still be declared but will not be taxed again.
The LIRS official said residents can file their returns through the agency’s electronic tax platform, which guides users through the process of declaring income, expenses and tax deductions.
Akande further explained that the filing window opens on January 1 every year and closes on March 31.
He warned that failure to comply attracts administrative penalties under the law. Defaulters may be fined ₦100,000 for the first month of default and ₦50,000 for each subsequent month until they file their returns.
According to him, the process not only helps the government ensure tax compliance but also enables authorities to better understand the scale of economic activity in Lagos, including household income and contributions to the state’s Gross Domestic Product.
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