The Director of Legal Services of the Lagos State Internal Revenue Service, Mr Seyi Alade, speaks on the legal implications of non-compliance with the filing of Annual Tax Returns rule by individuals and firms in the state, in this interview with ANOZIE EGOLE
Are there any specific legal provisions or statutes governing the filing of Annual Tax Returns by Individuals in Lagos State?
There are legal provisions governing the filing of Annual Returns, the chief amongst them is our grundnorm, which is the Constitution of the Federal Republic of Nigeria, 1999. It makes filing of returns a constitutional duty for Nigerian citizens. Section 24 (1) (f) provides that, it shall be the duty of every citizen to declare his income honestly to appropriate and lawful agencies and pay his tax promptly. Also, Section 41 of the Personal Income Tax Act, 2011 (as Amended) stated that a taxable shall without notice or demand, file a return of income from every source of the preceding year and within 90 days from the commencement of every year of assessment (before 31st March) to the relevant tax authorities.
What legal consequences may individuals face for failing to file their Annual Tax Returns in Lagos State?
An individual who fails to file tax returns will face multiple jeopardies for this failure as stipulated by the Personal Income Tax Act 2011 as amended. These jeopardies include both pecuniary fines and custodial punishments. Furthermore, the individual is liable to be assessed on a best of Judgment basis under extant provisions of the act. We have various instances of prosecuting individuals for failure to file and pay assessed taxes. Just recently the agency instituted criminal actions against a very popular individual in Lagos State for this offence. Upon his failure to attend to his criminal summons, the court issued a bench warrant for his arrest, and he was subsequently remanded at the Kirikiri Prison for jumping bail. This underscores the seriousness of this offense.
What legal rights do individuals have regarding the confidentiality of their tax information when filing Annual Tax Returns in Lagos State?
Individuals have legal rights to confidentiality regarding their tax information. This right is protected by extant provisions of the Personal Income Tax Act 2011 as amended. This provision prohibits tax authorities from disclosing taxpayer information to third parties except in circumstances strictly provided by the Act. This confidentiality provision ensures that taxpayer’s sensitive financial information remains secure and is only accessed by authorized personnel for legitimate purposes such as tax assessment and enforcement. Any breach of this confidentiality provision can result in legal consequences for the tax authority.
Can individuals legally challenge or appeal any decisions or assessments made by LIRS regarding their Annual Tax Returns?
Yes, an individual possesses the legal authority by section 58 of PITA to formally object to an assessment issued on him within 30 days stating the ground of objection to the assessment. This ensures fairness and accountability of tax assessment.
Are there any legal implications for individuals who knowingly provide false or inaccurate information on their Annual Tax Returns in Lagos State?
The law seriously frowns against giving false information in a tax return, and the consequences can be serious. Anyone who engages in this can be charged with an offense of rendering false statements and returns. Upon conviction, the individual may be subjected to a fine of N50,000 or imprisonment for not more than six months.
What legal recourse do individuals have if they believe they have been unfairly penalized or treated by LIRS about their Annual Tax Returns in Lagos State?
The first step to resolve any issue on assessment is to object within 30 days of receiving an assessment. If the taxpayer is still displeased with the decision of the agency, he can readily approach the Tax Appeal Tribunal for redress.
Are there any legal requirements or obligations for individuals to keep records of documentation related to their Annual Tax Returns in Lagos State?
The keeping of books of accounts is a legal obligation and it is very germane to the ability to file correct tax returns. It becomes prima facie evidence to support the accuracy of the returns filed and it helps to expedite reconciliation of assessment should there be a dispute. As a legal obligation, the failure to keep books of accounts is an offense under the Personal Income Tax Act 2011 as amended, it is punishable by a payment of N50,000 fine upon conviction.
How does LIRS encourage compliance with legal requirements for filing Annual Tax Returns among individuals in the state?
Even though the filing of returns is a constitutional and statutory one, which does not require LIRS to give notice or make a demand on taxpayers to file, the agency nonetheless still employs the combination of public notices on the various media platforms and by direct notifications in writing to inform individuals of their duties to file their returns. As earlier pointed out, the failure of Individuals to file their returns has dire consequences for the taxpayers. It should be noted most seriously that the consequential effects of failure to file or filing of false returns is a criminal charge before appropriate courts and this is akin to a strict liability offense and all the penalties are made upon conviction. Nobody should want to become a convict with all its attendant negative connotations on account of failing to perform an exercise that has been made extremely simple through the e-filing process.
Are there any legal distinctions or implications for individuals filing Annual Tax Returns based on their residency status in Lagos State?
The residency rule is both important for filing tax returns and payment of taxes. A taxpayer who resides within the geographical territory of Lagos State must file and pay his taxes to the LIRS.
In seeking technical assistance, what support channels are available to taxpayers?
The agency maintains a dedicated call center, a dedicated helpdesk, a chat option on the e-Tax platform and the LIRS official website, and very robust engagements on various social media platforms.
