The Lagos State Internal Revenue Service (LIRS) has announced plans to enforce personal tax filing for all residents, emphasizing the importance of this constitutional obligation. In an exclusive interview, Seyi Alade, Director of Legal Services at LIRS, shed light on the rationale behind this move and its implications for taxpayers.
Filing returns is a constitutional obligation, as stated in Section 24(1)(F) of the Constitution of the Federal Republic of Nigeria, 1999. Every citizen must declare their income truthfully and pay taxes due. This obligation is not limited to employees but extends to all individuals with income from various sources.
Section 41 of the Personal Income Tax Act makes tax filing everyone’s duty, not just employees. Individuals with multiple streams of income must file returns, including those with employment and self-employment income. This ensures that all income is accounted for and taxed accordingly.
Failure to file returns attracts penalties, and prosecution for tax evasion is possible. Taxpayers who miss the deadline will accrue penalties, which can lead to additional financial burdens.
The e-tax website simplifies the filing process, making it easier for taxpayers to comply. Proper accounting books must be kept, and documentation must support deductions and allowances. Taxpayers can file their returns online, and the computation and assessments can be done on the e-tax portal.
The Tax Appeal Tribunal is an independent body that reviews tax issues unresolved at the tax authority level. Taxpayers can appeal to the tribunal if unsatisfied with the tax authority’s position. The tribunal provides a platform for taxpayers to dispute assessments and ensure fairness in the tax system.
Taxpayers need to provide statements of financial transactions, computation of income from all sources, documents supporting deductions and allowances, and employment income details. For self-employed individuals, records of business profits and investment income are required.
The LIRS is committed to enhancing tax compliance through education and awareness. The agency has implemented various initiatives to simplify the tax filing process and provide support to taxpayers. These efforts aim to increase tax revenue and promote voluntary compliance.
The enforcement of personal tax filing has significant implications for taxpayers. It emphasizes the importance of accurate record-keeping and timely filing of returns. Taxpayers must ensure they comply with the regulations to avoid penalties and prosecution.
The Lagos State Internal Revenue Service’s decision to enforce personal tax filing is a strategic move to enhance tax compliance and increase revenue. Taxpayers must understand the importance of filing returns and the consequences of non-compliance. By providing accurate records and filing returns on time, taxpayers can avoid penalties and contribute to the development of Lagos State.