Navigating Nigeria’s tax system can be challenging for businesses, especially when determining whether to file with the Federal Inland Revenue Service (FIRS) or Lagos State Internal Revenue Service (LIRS). At Faturoti Taiwo and Co., we help Lagos businesses comply with both federal and state tax obligations seamlessly.
Key Differences Between FIRS and LIRS
| Tax Aspect | FIRS (Federal) | LIRS (State) |
|---|---|---|
| Governing Body | Federal Government | Lagos State Government |
| Tax Types | Company Income Tax (CIT), VAT, Petroleum Profit Tax | Personal Income Tax (PIT), Withholding Tax (WHT), Land Use Charge |
| Who Pays? | Companies, non-residents | Individuals, SMEs, partnerships |
| Filing Deadline | CIT: 6 months after accounting year-end | PIT: March 31st annually |
“Many businesses wrongly assume FIRS covers all taxes—this mistake leads to penalties.”
— Faturoti Taiwo, Lead Consultant
1. Federal Taxes (FIRS Responsibilities)
A. Company Income Tax (CIT)
- Rate: 30% of taxable profits
- Applies to: Registered companies (excluding small businesses under ₦25m turnover)
- Deadline: 6 months after financial year-end
B. Value Added Tax (VAT)
- Rate: 7.5% on goods/services
- Who collects: Businesses with ₦25m+ annual turnover
- Filing: Monthly returns by 21st of next month
C. Petroleum Profit Tax (PPT)
- Applies only to oil & gas companies (rates vary)
2. State Taxes (LIRS Responsibilities)
A. Personal Income Tax (PIT)
- Rate: Progressive (7%-24%)
- Applies to: Employees, sole proprietors, partnerships
- PAYE Deadlines: Monthly (10th of next month)
B. Withholding Tax (WHT)
- Rates: 5%-10% on contracts/interest
- Key point: Deducted at source, filed with LIRS
C. Business Premises Tax
- Annual levy based on location/size
- Exemptions: Small businesses (<₦25m revenue)
3. Common Compliance Mistakes to Avoid
Filing CIT with LIRS instead of FIRS Missing monthly VAT remittance deadlines Underreporting PAYE for employees Ignoring business premises renewal
Penalties include:
- Late filings: ₦25,000 – ₦50,000 + interest
- Underpayment: 10% of tax due
4. How Faturoti Taiwo and Co. Simplifies Compliance
We help Lagos businesses:
Determine FIRS vs LIRS filing requirements Automate tax calculations (CIT, VAT, PAYE) Prepare and submit returns before deadlines Resolve disputes with tax authorities
Case Study:
*A Lagos restaurant avoided ₦1.2m in penalties after we restructured their CIT/PIT filings.*
5. FAQs on FIRS & LIRS Taxes
Q: My business operates in multiple states—where do I pay taxes?
A: CIT to FIRS; PIT to each state where employees work.
Q: Can LIRS audit my company?
A: Yes—for state taxes like PAYE/WHT. FIRS handles CIT audits.
Q: What’s the penalty for late VAT filing?
A: ₦50,000 for first month + ₦25,000 monthly after.
Need Expert Tax Guidance?
Don’t risk penalties—let our ICAN-certified tax advisors handle your FIRS & LIRS compliance.
Call: (+234) 701-272-5021
Email: thomas@faturotitaiwoandco.com
Visit: https://faturotitaiwoandco.com
*”We’ve helped 200+ Lagos businesses save ₦500m in tax liabilities through proper planning.”*
— Faturoti Taiwo and Co. Team