LIRS Warns Employers as January 31 Tax Deadline Approaches

• The Lagos State Internal Revenue Service has cautioned employers across the state to meet the January 31 deadline for annual tax returns, warning that late or non-compliance will attract stiff financial penalties under Nigerian tax laws.

The Lagos State Internal Revenue Service (LIRS) has issued a strong warning to employers of labour in Lagos State to comply with statutory tax filing obligations as the January 31 deadline for annual returns approaches.

Speaking during an interview on Thursday, the Director of Personal Income Tax at LIRS, Ayodele Adebayo, stressed that failure to file annual returns within the stipulated time would attract stiff penalties as provided by law.

Adebayo explained that January is a critical month in the tax calendar, particularly for employers required to submit annual Pay As You Earn (PAYE) returns for all employees engaged in the preceding year. According to him, employers are legally required to file comprehensive details of every employee, including those who may no longer be in service.

“January is a very critical month for tax compliance. Employers must file detailed annual returns covering all employees engaged during the year, whether they are still in employment or have exited,” he said.

Under the Nigeria Tax Administration Act (NTAA), 2025, employers are mandated to submit annual PAYE schedules showing employees’ earnings, taxes deducted and remitted, alongside monthly tax deduction returns. Adebayo noted that the law clearly stipulates January 31 of each year as the deadline for filing returns for the previous year.

He warned that late or non-filing attracts significant administrative penalties.
“Any employer who fails to file, files late, or submits incomplete or inaccurate returns is liable to penalties, even if PAYE payments were fully remitted. Filing is a legal obligation, not optional,” Adebayo said.

Beyond penalties, he emphasised that non-compliance directly affects employees, particularly in obtaining Tax Clearance Certificates.

“Without proper filings by employers, employees will not be able to obtain tax clearance certificates. It does not matter if the employee worked for part of the year or the full year; their details must be filed,” he explained.

The LIRS director also clarified that while employers file PAYE returns on behalf of workers, individual employees are still required to file personal tax returns to qualify for tax clearance. Employers, he said, only report what has been deducted and remitted on employees’ behalf.

Adebayo listed corporate organisations, entrepreneurs, sole proprietors, and government ministries, departments and agencies operating in Lagos State as employers of labour obligated to comply with the filing requirements. He added that tax filing is guided by the residency rule, meaning taxes must be paid to the state where an employee resides.

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“As long as an organisation has employees resident in Lagos, it must file returns with Lagos State, regardless of where its headquarters is located,” he said.

Providing an update on compliance, Adebayo disclosed that about 10,000 companies have started the filing process so far, with over 7,000 successfully completing their submissions, while about 2,000 were flagged for incomplete or incorrect information. LIRS, he said, is targeting over 35,000 companies.

He urged employers to avoid last-minute filings and take advantage of the LIRS fully digital tax filing platform, noting that manual submission of annual returns is no longer accepted.

“The process is now completely digital. Employers can file from their offices using the LIRS portal, with templates already provided to make compliance easier,” Adebayo said.

He added that timely and accurate tax filing promotes transparency, supports effective government planning, and enhances the state’s capacity to deliver infrastructure and public services, advising employers to comply early to avoid sanctions and system congestion as the deadline draws near.