COVID-19: LIRS Announces TARC Meeting Procedures


Wednesday, June 24, 2020 / 02:28 PM / By KPMG Nigeria / Header Image Credit: KPMG Nigeria


The Lagos Internal Revenue Service (LIRS) recently issued a Public Notice announcing modifications to its process of conducting tax audit reconciliation committee (TARC) meeting. The modification was necessitated by the COVID-19 pandemic and the need to adhere to Public Health and Safety protocols announced by the Federal and Lagos State Government.

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The LIRS asserts that the Public Notice does not amend or override the provisions of the extant tax laws. Rather, it amends the process of conducting TARC meetings in response to the challenges posed by the pandemic.  In this regard, the LIRS relied on Section 29 of the Finance Act 2019, which affirms the admissibility of electronic delivery of correspondence.


The LIRS outlined the following compliance requirements and guidelines for its TARC meeting:


i.         TARC meetings will be held via video conferencing which will be initiated and hosted by the LIRS.  Physical meeting shall be an exception.


ii.      Support documents shall be submitted electronically. However, hardcopies will be accepted in the absence of softcopies.


iii.         Every issue in contention must be supported with relevant documents. Otherwise, such issue would be rendered moot and dischargeable.


iv.          The LIRS will call for additional documents where the documents provided are insufficient.  In addition, taxpayers would be required to submit all requested documents to the LIRS at least one week before the TARC meeting. Further, new documents would not be accepted during the meeting except under extra-ordinary circumstances and at the discretion of the TARC Chairperson.


v.                  TARC meetings will be constituted when the:

  • documents provided are in conflict with objection issues, or

  • field audit findings are materially higher than taxpayer's position, or

  • LIRS deems it necessary.



We commend the LIRS for taking this initiative to ensure continued tax administration in response to the challenges posed by the pandemic.  The need to leverage technological solutions for tax administration has become crucial especially with the health risks posed by the pandemic.  The introduction of provisions in Finance Act, 2019 that uphold the validity of electronic submission demonstrates government's commitment to leverage technology to improve tax administration in Nigeria, and provided the legal basis for the modifications introduced by the LIRS in the Public Notice.


While the LIRS reserves the right to constitute the TARC meeting, it is expected that the notice would afford taxpayers sufficient time to collate the necessary documents and prepare for the reconciliation meeting.  This is in view of the LIRS' position that all requested documents must be submitted at least one week before the meeting.  In addition, it is important that the LIRS clarifies what would constitute an "extra-ordinary circumstance" for the purpose of admitting additional support documents during a TARC meeting.  It will be unfair for the LIRS to dismiss additional support documents presented by a taxpayer to provide clarification on, or support, a new issue arising from discussions during the meeting.


Further, the Public Notice failed to address the issue of protracted tax audit exercise.  Though, the Public Notice specified the timeline for taxpayers to submit requested documents, there was no comment on the timeline for the TARC to furnish the taxpayers with revised assessments.  Nonetheless, it is hoped that adoption of technological solutions for TARC meetings will expedite the tax audit reconciliation process and help the government to unlock tax revenues trapped in protracted audit exercises.


Meanwhile, following this Notice, taxpayers with open tax audit exercises should expect to receive notice of meetings from the LIRS to reconcile outstanding tax audit issues and close-out pending tax audits, reviews and investigations.


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