On 29th January, 2021, the Lagos Internal Revenue Service ("LIRS" or "the Service") issued a Public Notice informing taxpayers of its grant of extension to the deadline for filing 2020 annual employees Pay-As-You-Earn (PAYE) tax returns by two weeks. Based on the LIRS' Notice, companies can now submit their PAYE tax returns which were due on 31st January, 2021 by 14th February, 2021.
The requirement to file this return is provided in Section 81(2) of the Personal Income Tax (PIT) Act which mandates all employers of labour to render returns of all emoluments paid to each employee in any preceding year to the Relevant Tax Authorities not later than 31st January of every year.
According to the Notice, the extension was granted in view of the challenges being experienced by businesses within Lagos State because of the COVID- 19 pandemic and in line with the LIRS' efforts to mitigate the effects of the COVID-19 Pandemic on taxpayers and residents of Lagos State.
Failure to file the required returns before the expiration of the deadline attracts a penalty of ?500,000 upon conviction, where such employer is a body corporate, and ?50,000 in the case of an individual.
The extended timeline provides an opportunity for employers who were unable to meet the earlier deadline to now submit returns without fear of incurring penalties for default. Given the additional extension, employers of labour who are yet to file their PAYE tax returns are advised to immediately engage their tax advisors and utilise the extended window to comply with their filing obligations.
As the government continues its drive for increased revenue, it is incumbent on all taxpayers to ensure compliance with the requirements of the law to avoid potential tax exposures.
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