Tax Policy of Nigeria’s Commercial Center Frustrates Entrepreneurs

In Lagos, Nigeria’s commercial hub, entrepreneurs are increasingly frustrated by the Lagos State Internal Revenue Service (LIRS) over issues like tax overestimation and double taxation. Tayo Oviosu, CEO of Paga, took to social media to criticize the LIRS for estimating incomes inaccurately. Other business owners shared similar grievances, highlighting inefficiencies and financial strains caused by LIRS’s practices. Their complaints stem from the fact that the “Best of Judgement” process, where LIRS estimates Personal Income Tax based on global income, often leads to inflated tax bills. Besides overestimation, entrepreneurs also complained about multiple taxations, especially if they operate in multiple local government areas. Frustrated by the situation, some of the entrepreneurs floated the idea of relocating to nearby states with less aggressive tax policies. If this happens, Lagos risks losing significant revenue, which could impact its ability to fund essential projects.

SOURCE: VENTURES AFRICA