Appointment Of Payers Of Capital Sum Inclusive Of Employers As Collecting Agents


Friday, January 04, 2019    04:42PM / By LIRS


Appointment of payers of Capital Sum inclusive of employers as collecting agents of payers for the purpose of deducting and remitting Capital Gains Tax (CGT) due on the respective capital sums paid including but not limited to compensation for loss of employment



The Lagos State Internal Revenue Service (LIRS) is issuing this public notice to all employers, company owners, or their representatives, employees and other members of the public. Our public notice on “Exemption of compensation for loss of employment” has clearly articulated the requirements for all employers to always segregate compensation to loss of employment into specific pay component. This is with the view of ensuring correct tax treatment for components that are:

a.      Tax Exempt

b.      Subject to PAYE and

c.       Subject to CGT


Legal Basis

Whilst section 6 sub section 2(a) and section 11 of CGTA define capital sum as any money or money’s worth received as consideration which is not excluded under the Act, section 6 sub section 1 (a-c) of Capital Gains Tax Act (CGTA) lists all types of capital sum and qualifying transactions on which CGT is applicable. “Capital sum derived by way of compensation for any loss of office or employment” is one of them.


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