Statutorily, under the Personal Income Tax Act (PITA) Cap P8 LFN 2004 (as amended), every employer is under obligation to file employers’ tax returns (Form H1) with the relevant tax authority of all emoluments paid to its employees in the preceding year. The timeline is not later than 31 January of every year.
In recent times, revenue authorities have been reviewing and automating their processes in order to strengthen the tax administration system. In line with this, the Lagos State Internal Revenue Service (LIRS) recently launched an e-filing platform for the filing of employers’ tax returns (Form H1).
The platform for filing the returns can be accessed via www.lirs.gov.ng and LIRS has communicated that it takes effect immediately. Specifically, LIRS has noted that no hard copy returns would be accepted for the 2018 tax returns filing due by 31 January 2019.
Taxpayers are authorised to upload only one set of returns. However, where a company opts to render separate returns for its local and expatriate employees, a request for approval could either be made in writing to the Director of Personal Income Tax, LIRS or a visit to the Personal Income Tax Headquarters of LIRS for further guidance by a dedicated staff.
New companies are expected to register online using either their RC number or taxpayer ID and LIRS will thereafter send a designated password to the taxpayer.
Existing companies who have filed Form H1 in previous tax years can access the e-filing portal using either their RC number or taxpayer ID and the designated password issued and communicated by LIRS via official letters. Companies who are yet to receive their passwords can send a request via email to firstname.lastname@example.org.
This initiative by LIRS is a positive step geared towards simplifying tax compliance procedures and ultimately improving the ease of doing business in Nigeria. It is expected that other states will follow suit.
The above notwithstanding, the notice of the implementation of e-filing is considered short and may not give taxpayers sufficient time to be familiar with the new system. A better approach would be for the automation process to run concurrently with the manual returns in the first year of implementation. Nevertheless, taxpayers are encouraged to familiarise themselves with the e-filing portal immediately to allow time for early resolution of any challenges faced and avoid penalties for late filing of tax returns.
Please click here to for the guidelines on how to submit annual returns on the e-filing portal.