Nigeria’s Lagos State announces new tax measures to bolster COVID-19 resilience efforts

NIGERIA – Lagos, Nigeria’s largest state by population size, has announced new tax measures 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%.

The reduction was part of a new regulatory framework by the state for ride-hailing companies which will take effect in late August this year.

According to the framework, ride-hailing companies will be required to pay the Lagos State Government a 10% service tax on each transaction.

The measures according to a report by Nairametrics are comprised of a number of additional incentives and reliefs for businesses and individuals in the state.

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.

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