The Lagos State Internal Revenue Service has reaffirmed that all employers of labour operating in the state must file their annual tax returns for the 2025 financial year on or before January 31, 2026, warning that failure to comply will attract sanctions under Nigeria’s new tax regime.

The reminder follows the coming into force of the Nigeria Tax Administration Act 2025, which consolidates and updates rules governing tax administration across the country. Under the Act, employers are legally required to submit comprehensive annual returns detailing all emoluments paid to their employees and the taxes deducted and remitted on their behalf.

In a statement issued by the Executive Chairman of LIRS, Dr Ayodele Subair, the agency stressed that the January 31 deadline is statutory and applies to all employers, regardless of size or sector, who have staff working in Lagos State. The obligation covers companies, government ministries and agencies, non-governmental organisations, and other entities that engage workers or service providers.

Subair explained that the annual returns must capture not only salaries and wages but the full spectrum of emoluments and compensation paid during the 2025 financial year. This includes allowances, bonuses, commissions, benefits in kind, and any other form of remuneration, as well as payments made to service providers, vendors, and consultants where withholding tax or other applicable taxes should have been deducted.

According to him, the purpose of the requirement is twofold: to ensure that all taxes due on employment income and related payments are properly accounted for and remitted, and to provide the tax authorities with accurate data for monitoring compliance and planning public finances.

“Employers must prioritise the timely filing of their annual income tax returns. Compliance should be part of our everyday business practice. Early and accurate filing not only ensures adherence to the law as required by the Nigerian Constitution, but also supports effective revenue tracking, which is important to Lagos State’s fiscal planning and sustainability,” Subair said.

Section 14 of the Nigeria Tax Administration Act 2025 specifically mandates employers to file detailed annual returns of all emoluments paid to employees, including the taxes deducted and remitted to the relevant tax authorities. The law stipulates that such returns must be filed and submitted no later than January 31 of each year for the preceding financial year.

LIRS has repeatedly emphasised that this filing is not optional. It is a mandatory legal obligation, and non-compliance attracts statutory sanctions. These may include administrative penalties, interest on unpaid amounts, and other enforcement measures provided for under the Act and related tax laws. Persistent defaulters risk audits, assessments, and possible prosecution, depending on the severity and duration of the breach.

Subair urged employers to treat tax compliance as a core element of corporate governance and risk management, rather than a mere administrative chore. He noted that companies that fail to file or that submit inaccurate or incomplete returns expose themselves to financial penalties, reputational damage, and potential disputes with both employees and regulators.

To streamline the process and reduce the burden on taxpayers, LIRS has fully migrated annual return filing to its electronic platform, known as eTax. The agency has phased out manual submissions, meaning that paper-based returns are no longer accepted in Lagos State.

Under the current system, employers are required to submit their annual tax returns exclusively through the LIRS eTax portal. The platform is designed to allow employers to register, file, pay, and manage their tax obligations online, with access available around the clock.

Subair described the eTax platform as secure and user-friendly, explaining that it was developed to simplify and standardise tax administration processes across the state. By moving to a fully digital system, LIRS aims to reduce errors, cut processing times, and improve transparency in the way tax information is collected and stored.

He added that electronic filing also enables better data integrity and easier reconciliation of records between employers, employees, and the tax authority. This, in turn, supports more accurate revenue forecasting and helps the state government plan and execute its budget and development programmes.

As part of the filing process, employers are required to ensure that the Tax Identification Number of every employee is correctly captured. Subair advised that any staff member who does not yet have a Tax Identification Number must obtain one promptly, as missing or incorrect TaxID details can delay processing and may trigger queries or compliance reviews.

Tax Identification Numbers are central to Nigeria’s modernised tax system, allowing authorities to track individual tax records across different employers and over time. Proper use of TaxIDs helps prevent double taxation, under-reporting, and identity-related discrepancies in tax filings.

LIRS has encouraged employers to begin preparations well ahead of the January 31 deadline, rather than waiting until the final days. Early preparation typically involves reconciling payroll records, confirming that all statutory deductions have been made and remitted, verifying employee details, and ensuring that the organisation’s eTax profile is active and up to date.

Tax practitioners note that late or rushed filings are more prone to errors, which can lead to additional queries from the tax authority and, in some cases, penalties for incorrect or incomplete information. By starting early, employers have time to resolve discrepancies, seek clarification where needed, and obtain technical support for any issues encountered on the eTax platform.

Subair reiterated that LIRS has made support channels available to assist employers with the filing process. Those who require further information or technical guidance can visit any LIRS office across Lagos State or contact the service through its official help and customer service platforms. The agency also periodically organises stakeholder engagements, workshops, and webinars to educate employers and tax professionals on new rules and digital tools.

Tax experts say the renewed emphasis on timely annual returns is part of a broader effort by Lagos State and federal authorities to strengthen tax administration, widen the tax net, and reduce leakages. Lagos, Nigeria’s commercial hub, relies heavily on internally generated revenue to fund infrastructure, social services, and public sector wages, making efficient tax collection a critical pillar of its fiscal strategy.