Abideen Akande, Special Adviser to the Executive Chairman of the Lagos State Internal Revenue Service (LIRS), has explained why filing annual tax returns is compulsory for residents of Lagos State.
Speaking in an interview with Helen Oji of The Guardian Nigeria, Akande said the process helps tax authorities determine how much individuals earned in the previous year and how much tax they may have already 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. Nigeria operates a self-assessment tax system, which means you voluntarily declare your income for a defined period,” he said.
According to him, the filing requirement is rooted not only in statutory provisions but also in the country’s constitutional obligations.
“The interesting thing is that people often talk about constitutional rights but shy away from constitutional obligations. Filing by individuals is actually predicated on both the Constitution and the law. In any organised society, you must have a tax system,” he said.
Akande explained that under Nigeria’s self-assessment system, individuals declare their income and indicate any taxes already deducted at source. If any outstanding tax remains, taxpayers are expected to pay it. However, those facing financial challenges can approach tax authorities to request a structured payment plan.
He also emphasised that filing tax returns is mandatory even for individuals who believe they do not owe any tax.
“Even if by your own assessment you believe you do not owe the government any money, you are still expected to file. For instance, if you earned below N840,000 in a year — roughly the annual equivalent of the minimum wage threshold — your tax liability may be zero, but you still need to declare the income,” he explained.
Akande said residents can file their returns through the LIRS electronic tax platform.
“You simply go to the e-tax platform at e-tax.lirs.net, input your details, and the system guides you through the filing process,” he said, adding that taxpayers must disclose all income sources including salaries, side businesses, rental income and dividends.
He further noted that the filing covers income earned in the previous year. For instance, in 2026 taxpayers are expected to declare income earned between January 1 and December 31, 2025.
Akande added that the information gathered helps authorities better understand economic activity in the state and contributes to measuring the state’s Gross Domestic Product.
He also revealed that the tax filing window runs from January 1 to March 31 each year.
On penalties for non-compliance, Akande warned that defaulters risk significant fines.
“Under the new law, a taxable person who fails or refuses to file returns, or knowingly submits incomplete or inaccurate returns, is liable to an administrative penalty of N100,000 for the first month of default and N50,000 for each subsequent month until compliance is achieved,” he said.
He urged residents to comply promptly rather than incur penalties, noting that the cost of compliance is far less than the financial consequences of default.
