The Lagos State Internal Revenue Service (LIRS) has
issued a Public Notice to provide clarifications on the revised definition of
gross income and exemption of minimum wage or lower employment income from
Personal Income Tax (PIT). This is pursuant to the amendments introduced
by Finance Act, 2020 to the PIT Act Cap.P8 LFN 2004 (as amended) [PITA].
Based on the definition of gross income in Section
33(2) of PITA, taxpayers are required to deduct tax-exempt items listed in
paragraph 2 of the Sixth Schedule, non-taxable income, and all allowable
business expenses and capital allowance, in determining the applicable gross
income for computing consolidated relief allowance. However, these items will
still qualify for deduction in determining the chargeable income. Further,
Section 37 of PITA exempts individuals earning the national monthly minimum
wage of N30,000 or less from the
payment of PIT. The Public Notice, however, provides that any additional income
earned by taxable persons on national minimum wage from other sources,
excluding salaried employment, will be subject to PIT accordingly.