How Lagos Residents Can File Annual Tax Returns Before March 31 Deadline

The Lagos State Internal Revenue Service (LIRS) has issued fresh guidance to taxpayers ahead of the March 31 deadline for filing individual annual tax returns, outlining who must file, the required documents, and the penalties for noncompliance.

Speaking on the process, Foluso Mustapha, Director of Tax Audit at LIRS, said the obligation applies to a wide range of taxpayers, including employees, freelancers, business owners, and individuals who earn income from multiple sources.

The annual tax return is a formal declaration submitted to the tax authority showing income earned in the previous year, as well as any deductions or tax reliefs claimed.

Who must file annual tax returns?

According to LIRS, all taxable residents in Lagos State must file annual tax returns. This includes salaried workers, self-employed individuals, entrepreneurs, freelancers, and people who receive income from investments or rental properties.

Mustapha explained that the tax return is meant to give the government a complete picture of a taxpayer’s income and allowable deductions for the year.

Is filing tax returns compulsory?

Yes.
LIRS stressed that filing annual tax returns is a legal obligation for all taxable residents in Lagos State.

Even individuals who may not have additional tax to pay after deductions are still required to file their returns within the stipulated timeframe.

Deadline and penalties for non-compliance

The deadline for submitting individual annual tax returns is March 31 each year.

Taxpayers who fail to meet the deadline may face financial penalties. LIRS stated that defaulters could be fined N50,000 for the first month of default and N25,000 for each additional month they fail to file their returns.

Mustapha also warned that persistent refusal to settle confirmed tax liabilities could lead to the application of the “power of substitution.”

This provision allows the tax authority to recover unpaid taxes by directing third parties—such as banks, business partners, or tenants holding funds on behalf of the taxpayer—to remit the money directly to the government.

However, LIRS noted that this action is only taken after the tax liability has been formally established and the taxpayer has failed to comply despite receiving notice.

Do employees still need to file if PAYE is deducted?

Yes.
The tax authority clarified that Pay As You Earn (PAYE) deductions made by employers are only advance tax payments.

Employees are still required to file annual tax returns to declare other possible sources of income, including rent, investments, side businesses, or freelance earnings.

What if someone earned little or no income?

LIRS said individuals who earned little or no income during the year must still file a return.

In such cases, taxpayers can submit a nil return, indicating that they had no taxable income for the period.

Documents needed for filing tax returns

Taxpayers are advised to prepare supporting documents that accurately reflect their financial activities. These may include salary records, payroll statements, bank statements, business owners’ financial statements, rent receipts, investment income records, and evidence of deductible expenses.

These documents help determine each taxpayer’s correct tax position.

Guidance for first-time taxpayers

For individuals filing tax returns for the first time, LIRS recommends several steps.

Taxpayers should first obtain a Tax Identification Number (TIN). They should then gather records of income earned throughout the year, identify allowable deductions, and complete the relevant tax return form through the LIRS online portal.

The process applies to all categories of workers, including employees, entrepreneurs, freelancers, and gig-economy workers.

Are freelancers and digital creators required to file?

Yes.
LIRS stated that income earned through freelance work, online platforms, digital content creation, brand partnerships, and other independent activities must be declared when filing annual tax returns.

What about retirees or people who changed jobs?

Retirees who earn income from sources such as rent, investments, or business activities must also declare those earnings.

Similarly, individuals who changed jobs during the year are expected to file tax returns to reconcile income earned from different employers.

Does filing tax returns mean paying more tax?

Not necessarily.
LIRS explained that filing a tax return simply establishes the taxpayer’s correct tax position based on the income earned during the year.

In some cases, taxpayers may discover that they have no additional tax to pay.

Is filing tax returns free?

Yes.
Submitting annual tax returns to the tax authority does not require any payment. Taxpayers can complete the process online through the official LIRS portal.

Correcting mistakes after submission

If a taxpayer discovers an error after filing, LIRS allows them to submit an amended return or voluntarily disclose the mistake to update their records.

Warning about tax scams

The tax authority also advised residents to remain cautious of individuals posing as tax officials. Legitimate tax authorities do not request payments through unofficial channels or demand sensitive personal information without proper verification.

Any suspicious communication should be reported through official government channels.

Importance of tax compliance

Mustapha emphasised that tax compliance plays a critical role in funding development projects across Lagos State.

According to him, tax revenue supports infrastructure, healthcare, education, transportation, and other public services that improve residents’ quality of life.

He added that voluntary compliance by taxpayers enables the government to sustain these investments and expand development initiatives across the state.