The Lagos State Internal Revenue Service (LIRS) has changed the tax filing narratives. According to the Personal Income Tax Act (PITA) Cap P8 LFN 2011 (as amended), every employer shall file an employer tax returns (Form H1) with the relevant tax authority by 31 January. In Lagos, a complete Form H1 comprise a printed copy of the returns and other information stored on a Compact Disc. This return was filed in duplicates, at LIRS Headquarters. Thereafter, LIRS would insert its official stamp, as received, on the returns and handover one copy to the taxpayer as a proof of filing. This manual tax filing cycle has now come to an end.
To improve tax administration and reduce the tax compliance process in Lagos State, LIRS has introduced e-filing services. The portal will enable taxpayers to file their returns electronically and interact online with LIRS support team. Furthermore, taxpayers can submit their Form A (Return of Income and Claims for Allowances and Reliefs) on the portal. LIRS e-filing takes effect immediately and hard copy returns would no longer be accepted. This rule also applies to 2018 tax returns which is due on 31 January 2019.
Registration procedure for LIRS e-filing
To access LIRS e-filing service, taxpayers are required to visit the official website (www.lirs.gov.ng). On the portal, taxpayers fall into two categories, new companies and returning companies.
- New companies are companies who are yet to file Form H1 with LIRS. These companies will register online using either their RC number or taxpayer ID. Next, LIRS will approve the registration; including a unique password for the taxpayer.
- Existing companies companies who have filed Form H1 in previous tax years. These companies can access the portal using either their RC number or taxpayer ID plus the unique password provided by LIRS in its formal letters.
Companies who are yet to get their passwords can notify LIRS via email to firstname.lastname@example.org. Meanwhile, password recovery is not yet automatic and can only be changed by get in touch with LIRS.
Upon registration, a taxpayer’s e-filing account will be created according to the kind of taxes which a company should pay. Nevertheless, a taxpayer will be able to file returns for the registered taxes. Taxpayers can upload one tax returns. However, if a company chooses to file different returns for its national and expatriate employees, the taxpayer must write to the Director of Personal Income Tax, LIRS or visit LIRS Headquarters.
Please note that the registration procedure applied to returns filed during the year 2019. LIRS has migrated the filing of annual tax returns for 2020 to a new portal – https://etax.lirs.net. More details on filing of tax returns in 2020 is here.
Other points to note
Based on this reform, taxpayers can easily file their tax returns at any time (after working hours) and anywhere before the statutory deadline, thus lowering the difficulty, time and cost of paying taxes. Even so, the notice of switching to an e-filing system is rather short and taxpayers may not have ample time to be aware of the new procedure. It would be ideal if LIRS accepts tax returns submitted either online or at LIRS office in 2019. Taxpayers should access the e-filing portal now to allow fast resolution of any concern and prevent late filing penalty. Likewise, LIRS must provide constant access to the portal in order to tackle technology downtime; otherwise provision should be available for filing of manual returns.
We expect slight problems at the onset but if properly implemented, this initiative will improve the ease of paying taxes in Nigeria. According to the World Bank’s Ease of Doing Business Report (2019), Nigeria ranks 157 out of 190 economies on the ease of paying taxes. It takes 347 hours to pay taxes per annum.
Updated: 7 January 2020
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