The Lagos State Government has announced additional tax incentives and reliefs for businesses and individuals in the state, as part of measures aimed at reducing the burden on taxpayers amid the COVID-19 pandemic.
The disclosure was made in a public notice issued by the Lagos State Internal Revenue Service (LIRS) and signed by its Executive Chairman, Ayodele Subair. The Public Notice which follows its earlier COVID-19 palliative measures published in the Tax Alert Issue No. 3.7 of March 2020 and Tax Alert Issue No. 6.12 of June 2020.
The additional palliative measures to be implemented by the Service are as follows:
- Approval of instalment payment of outstanding liabilities on case-by-case basis to ease the cashflow challenges that taxpayers are currently facing;
- Waiver of penalty for late payment of Pay-As-You-Earn liabilities for March and May 2020;
- Waiver of penalties due for late filing of 2020 annual tax returns (Form A);
- Waiver of interest and penalty on additional tax liabilities arising from 2009 to 2015 tax audit exercise for taxpayers who commit to a structured payment plan that terminates by 31 December 2020;
- Grant of tax credit of 20% of cash and kind donations made by resident individuals to Lagos State Government (LASG) for COVID-19 management. The credit will be available to offset 2021 year of assessment tax liabilities and subject to a cap of 35% of tax due;
- Increase in payment channels that are easier, simpler and more convenient for taxpayers; and
- Adoption of video conferencing as the default mode of conducting tax audit reconciliation committee meetings.
The government had earlier given 3 months extension of deadline for filing annual returns from March 31 to June 30, 2020.
The incentives are aimed at helping businesses and individuals living in the state cope with the economic challenges occasioned by COVID-19 pandemic.
Earlier, Lagos State Governor, Babajide Sanwo-Olu, okayed the slashing of operational license fee placed on ride-hailing companies operating in the state by 20%.
Lagos State Internal Revenue Service (LIRS) in a statement explained that the tax incentives were part of the measures taken to mitigate the impact of the coronavirus pandemic on taxpayers in Lagos and ensure business continuity.
Following the announcement, LIRS shall be allowing the payment of outstanding liabilities in installments to ease cash flow challenges that may affect taxpayers.
The revenue service also announced the Waiver of penalty for late payment of liabilities under PAYE that were due during the period when the state was under lockdown (March-May 2020).
LIRS further waived the interest and penalty components of outstanding tax audit liabilities from 2009 to 2015 for entities that present and keep to a structured payment plan that terminates on or before December 31, 2020.
The internal revenue service also announced a grant of tax credits of 20% of cash and kind donations made for COVID-19 by residents to the Lagos Statement Government.
LIRS also announced that it was adopting video conferencing as the default mode for Tax Audit Reconciliation Committee (TARC) meetings in consonance with social distancing advisories from the Government.