Lagos Govt Defends N36m Tax Bill to TikTok Influencer, Says All Earners Must Pay

By DAYO ADESULU

Peller Cries Out Over Alleged Excessive Taxation

The Lagos State Government has reiterated that the Lagos State Internal Revenue Service (LIRS) makes the best judgment in all matters relating to taxation.

This comes after a young TikTok influencer, Habeeb Hamzat, popularly known as Peller, raised alarm over a purported N36 million tax bill allegedly slammed on him by the state.

Peller, who only came into the limelight in 2023, lamented in a viral video during a livestream with singer Peruzzi that the government was unfairly demanding what he described as an outrageous sum.

“The task force said I should pay N36m in tax. I swear to Almighty Allah, I don’t have anything. I only came into the limelight last year. Are you, Peruzzi, even paying tax, and how much is it? Why should I pay N36m? What does that even mean? Why will the government take money from me when it has never given me anything, not even TikTok support?” Peller lamented.

His outcry sparked widespread debates on social media, with many young Nigerians questioning how government tax assessments are calculated, especially for digital creators.

Lagos Govt Responds

Reacting to the controversy, the Special Adviser to the Governor on Tax and Revenue, Abdulkabir Ogungbo, told journalists on Tuesday that he would review the specifics of Peller’s case. However, he stressed that anyone earning legitimately in Lagos is obligated to pay taxes.

Ogungbo said the LIRS, which operates as an autonomous agency, has the statutory authority to assess and give the best judgment on behalf of the state government.

“I need to take a look at this particular context in question. But generally, the LIRS is saddled with the responsibility of assessing and giving the best judgment. Anybody who earns a legitimate income in Lagos must declare it honestly to the authorities. Section 24 of the Nigerian Constitution makes that obligation clear,” he stated.

Content Creators and Taxation in Lagos

When asked about tax obligations for influencers and online content creators, Ogungbo explained that new reforms now cover digital assets and virtual transactions.

He noted that personal income tax laws extend to both physical and virtual earnings.

“Naturally, the law allows for personal income tax, meaning that when you earn a living or income from what you do legitimately, you are supposed to pay tax. Whether virtually or physically, you’re meant to remit tax to the LIRS,” he said.

The adviser added that residents of Lagos who earn income online but cannot prove that they pay tax elsewhere must remit their tax locally.

“If you are based here, use our infrastructure, and earn income here, you must pay your tax here. The only exemption is if you can prove that you already pay tax to another jurisdiction,” Ogungbo explained.

LIRS Yet to React

While the government has maintained that taxation is a constitutional duty, the LIRS has not officially responded to Peller’s claim. Attempts to reach its Head of Corporate Communications, Monsurat Amasa, were unsuccessful as calls and text messages sent by our correspondent on Monday and Tuesday went unanswered.

For now, Peller’s case remains unresolved, but the controversy has once again put the spotlight on Nigeria’s evolving tax policies for the digital economy and whether government assessments align with the realities of young content creators.

How LIRS Calculates Personal Income Tax

The Lagos State Internal Revenue Service (LIRS) uses the Personal Income Tax Act (PITA) to determine how much tax individuals, including content creators and influencers, must pay. Here’s a simplified breakdown:

1. Income Declaration

• Individuals must declare all sources of income – salary, brand deals, advertisements, endorsements, or online earnings.
• Failure to declare income can result in “best of judgment assessment”, where LIRS estimates tax payable based on available data.

2. Allowable Deductions

Before tax is calculated, some expenses and allowances are deducted, including:

• Consolidated Relief Allowance (CRA): N200,000 or 1% of gross income (whichever is higher) plus 20% of gross income.
• Pension contributions, life insurance premiums, and NHF contributions are also deductible.

3. Tax Rates (Progressive System)

Nigeria operates a graduated (progressive) tax rate:

• First N300,000 → 7%
• Next N300,000 → 11%
• Next N500,000 → 15%
• Next N500,000 → 19%
• Next N1,600,000 → 21%
• Above N3.2m → 24%

This means the higher the income, the higher the percentage applied.

4. Content Creators & Virtual Earnings

• If a creator lives in Lagos but earns through TikTok, YouTube, or brand sponsorships, LIRS considers it taxable income.
• Unless the creator can prove they already pay tax in another jurisdiction, Lagos has the right to collect.

5. Penalties for Non-Compliance

• Non-declaration or late payment may attract penalties, interest, or legal action.
• LIRS also has powers to estimate (sometimes aggressively) when records are unclear, leading to cases like the alleged N36m bill.

👉 In summary:
A young content creator like Peller is expected to declare his income, provide proof of earnings and expenses, then LIRS applies the progressive rates. The controversy usually arises when influencers fail to declare early, leaving LIRS to issue a heavy best of judgment assessment.