There are various tax authorities that taxes are paid to based on the location and type of tax to be paid. Lagos State Internal Revenue Service (LIRS) receives tax payments from inhabitants of Lagos State. Tax filing is one of the tasks every individual, worker, and business owner in Nigeria must fulfil.

Section 41 of the Personal Income Tax Act states that annual tax returns must be filed. According to this clause, all taxpayers are required to submit a return detailing their total income from all sources for the previous year to the state tax authority where they are considered to live within 90 days of the start of each new assessment year, and there are penalties for defaulting.

Payroll taxes, withholding taxes, company premises levies, and development levies are among the taxes and other levies paid to the Lagos State Internal Revenue Service (LIRS).  

There is a unique process required for filing taxes in Lagos and if you are not aware of the process, it can be daunting and frustrating. The focus of this article is the Lagos State Internal Revenue Service’s tax filing process and the reforms put in place to make this process easy.

How to apply to the Lagos State Internal Revenue Service (LIRS) for tax filing

There are 2 processes that you can use to apply to the Lagos State Internal Revenue Service Scheme (LIRS), for tax filing. They include: 

1. Physical registration: You can go through the website  https://lirs.gov.ng/contact#locate_us  to find the closest Lagos State Internal Revenue Service office to you. Then you will be required to go through the following processes:

• Fill out a formal PAYE tax registration application form that includes an LIRS questionnaire
• Submit  a copy of the following documents:
  • Memorandum and Articles of Association, Certificate of Incorporation, and Form CAC 1.1 are required for businesses (Status report). Form CAC 7 (Specifics of the Company’s Directors) and CAC 2 were previously (Statement of share capital and return of allotment of shares).
  • Business Name Registration Certificate and Form 1.1, formerly Form CAC 7, are for businesses.
  • Energy bill
  • Rent agreement
  • Directors tax clearance 
  • Staff payroll

• Proof of business premises levy payment
• Proof of development levy payment
• After your registration and submission of these documents, Lagos State Internal Revenue Service will provide a taxpayer ID and information on how to send taxes.

2. LIRS also uses electronic filing: The process is simple, easy, and convenient. It was created with the users in mind. The process is seamless and requires a few simple steps. 

• To register on the LIRS E-tax site, visit www.etax.lirs.net 
• Click Signup, (new users who do not yet have Lagos State Internal Revenue Service TaxPayer ID can register on the LIRS E-Tax site). 
• To create a new TaxPayer ID, provide your personal information, your Bank Verification Number (BVN) and date of birth.

Furthermore, tax officers have been appointed at various tax stations to help people complete online registration and filing of tax returns on the e-Tax site as part of the agency’s effort to make compliance duties for taxpayers easier.

Reforms put in place to make this process easy 

As the world is going digital, it is important that every sector digitize its process to match the pace and innovations of the globe. The Lagos State Internal Revenue Scheme (LIRS) has also adopted the digital world by digitizing the process of tax filing in order to make it easier. 

Businesses can now electronically submit their federal and state taxes thanks to the introduction of an e-filing system from the comfort of offices or homes. These include Stamp Duty Tax, Infrastructure Development Tax, Capital Gains Tax, Value Added Tax (VAT), Corporate Income Tax (CIT), and VAT.

Some of the impacts of these reforms are: 

1. Access to an online platform for all taxpayer classes
2. Taxpayers can electronically pay and file state taxes, including PAYE and others, from the convenience of their offices or homes.
3. Statutory deductions can be submitted online by employers on behalf of employees.
4. Audits of corporate income tax (CIT) are now completed in 63 days.
5. Better tax administration and collecting practices in terms of openness and effectiveness
6. Easier to use and more effective for taxpayers.
7. Income tax revenue growth.
8. The typical time taken to file and pay taxes has now been cut by more than 50%.

Only the LIRS e-Tax site at https://etax.lirs.net may be used to file tax returns in Lagos State. Therefore, registration on the e-Tax system is required of all State taxpayers. The e-Tax interface was specifically designed with your convenience in mind. Therefore, it is important that you or your business don’t default on paying your taxes.