March 27, 2020
On 25th March, 2020, the Lagos State Internal Revenue Service (LIRS) issued a public notice, informing taxpayers that the deadline for filing of Annual Returns for individual taxpayers and self-employed persons who are resident in Lagos State has been extended from 31st March 2020 till 31st May 2020. The extension was granted to taxpayers because of the impact of the COVID-19 pandemic on both commercial and organizational activities.
The requirement to file this return is provided in Section 41(1) of the Personal Income Tax (PIT) Act, which mandates all taxable persons to file a return of income for every tax year with the tax authority of the State in which the taxable person is deemed to be resident within 90 days from the commencement of each tax year. However, this deadline has now been extended by two months and will thus elapse on 31st May, 2020.
Based on this notice, taxpayers now have up to 31st May, 2020 to file their annual tax returns for the 2019 tax year, rather than 31st March, 2020 provided in the law. Taxpayers can therefore take advantage of this extension given the likely disruption to their business activities and their ability to comply with filing deadlines during the crisis period. There are however concerns as to whether taxpayers can sufficiently rely on the LIRS’ notice of extension of filing deadline in the event of a future dispute with the tax authorities. This is because the filing deadline is a strict provision of the PIT Act and the provisions of the tax laws have been held to override provisions of Circulars and Notices. It is therefore advisable for the LIRS and other State tax authorities that intend to give filing extensions to taxpayers to do so by issuing Executive Orders or Regulations published in the Official Gazette which will grant such incentives and codify any variations to the substantive provisions of the tax laws.