(Effective 1^st January 2026).

The Lagos State Internal Revenue Service (LIRS) has announced the commencement of administrative penalties under the Nigeria Tax Administration Act, 2025 (NTAA 2025), to strengthen compliance and deter tax default by all taxable persons within Lagos State.

Who Is Affected?

• Individuals and businesses in Lagos State.
• Employers, agents, and intermediaries.
• All persons with tax obligations to LIRS.

Penalised Offences.

The LIRS shall impose administrative penalties for all contraventions specified under the Act, including but not limited to:

• Failure to register with LIRS as required;
• Failure to file tax returns within statutory timelines;
• Failure to deduct and remit taxes withheld or collected;
• Late payment or non-payment of taxes;
• Submission of false or misleading returns;
• Obstruction of authorised tax officers;
• Failure to maintain proper books and records;
• Non-compliance with data or information requests issued by LIRS.

Categories and Application of Penalties.

Administrative penalties shall include monetary fines as prescribed under the Act, and penalties will be imposed in accordance with the applicable provisions of the NTAA 2025 and any subsidiary regulations or directives issued by LIRS.

Penalties determined based on:

• Severity of offence
• Frequency of non-compliance
• Amount of tax involved
• Duration of default
• Whether voluntary disclosure was made.

LIRS may impose maximum penalties or pursue criminal prosecution in cases of fraud, deliberate evasion, or persistent non-compliance.

Voluntary Disclosure and Mitigation.

Taxpayers who voluntarily disclose defaults before detection may qualify for reduced penalties, subject to full disclosure and payment of outstanding taxes and interest.

Notification and Enforcement.

LIRS will communicate all administrative penalties to affected taxable persons through a formal notice of assessment, electronic communication, or any other means authorised under the Act. Non-compliance with penalty notices may attract further enforcement measures, including but not limited to:

1. Garnishment of bank accounts;
2. Distrain action;
3. Enforcement of liens; and
4. Prosecution, where applicable.

Rights and Obligations of Taxpayers

 Taxable persons retain the right to:

• Request clarification on any imposed penalties;
• Apply for review or lodge objections within the statutory timelines;
• Seek advance rulings on compliance obligations; and
• Access the dispute resolution mechanisms provided under the Act.

All taxable persons are required to register and obtain a Tax Identification Number (TIN), fully cooperate with LIRS, provide accurate and complete information, and maintain proper and up-to-date tax records in accordance with the Act.

Key Takeaways: All taxpayers are advised to review their tax affairs and ensure full compliance ahead of 1 January 2026 to avoid penalties and enforcement actions.