Lagos business premises and development levies

What the Lagos business premises levy costs to register and renew, who pays the separate development levies, and how to budget and record them.

By Achekam · 11 October 2026 · 4 min read · For Running a business businesses in Nigeria

Lagos businesses pay their big taxes to the Nigeria Revenue Service and the Lagos State Internal Revenue Service (LIRS), but a set of smaller State and local charges also turns up every year. They are small enough to be forgotten and visible enough to cause trouble: an official at the door asking for this year's receipt is not the moment to discover nobody renewed.

Two of these charges have similar names and are often confused: the business premises levy, which falls on businesses, and the development levy, which falls on individuals. A third, the economic development levy, is something else again. This article explains each as the LIRS describes it, and how to keep them under control in your books.

The business premises levy: registration and renewal

The LIRS Tax Types page says the business premises levy is payable annually by registered businesses on premises used to derive income in the State. It sets out two pairs of amounts:

The LIRS FAQs give the same amounts as maximums under the Taxes and Levies (Approved List for Collection) Act 1998, as amended. So these are ceilings, and you should not be asked for more.

Two practical points follow from the wording. The levy attaches to premises, so a business with a shop in one area and a warehouse in another should check whether each site is registered. And it renews every year, so it belongs in the annual calendar alongside the bigger returns. The LIRS lists this levy, with the other taxes it collects, on its tax types page; that page is undated and cites the repealed Personal Income Tax Act elsewhere, so confirm the amounts are current before you pay.

Urban or rural: who decides

The difference between the urban and rural amounts is significant, so the classification of your premises matters. The LIRS FAQs say the Lagos State Ministry of Finance decides which areas are urban. If you are unsure which applies to your address, ask the LIRS before paying rather than guessing either way. Keep the answer in writing with the premises file, so next year's renewal does not reopen the question, and check again if the business moves to a new address.

The development levy: individuals, not businesses

The LIRS Tax Types page describes a development levy as an annual flat-rate levy of ₦100 payable by all taxable individuals residing in Lagos State. It is a levy on people, not on premises or companies. The page is undated, so confirm the figure is current.

Do not confuse it with two other charges with "development" in the name:

• The economic development levy. The LIRS FAQs separately list an Economic Development Levy, described as an annual levy paid by businesses operating within Lagos State. It is not the same as the ₦100 individual levy.
• The federal development levy. The 4% development levy under the Nigeria Tax Act is a federal charge on companies' assessable profits, collected by the NRS. It has nothing to do with the Lagos levies.

When a demand arrives, read the name of the levy and the issuing authority carefully before you decide which budget line it belongs to.

Local government levies and rates

PwC's summary of Nigerian taxation says local governments may collect only levies and rates, while State governments collect the income taxes of individuals and unincorporated entities. A Lagos business may therefore also receive demands from its local government council for rates and permitted levies. Keep those separate from State levies in your records, because they go to different authorities and are paid through different channels.

Recording levies as bills

In Achekam, a business records supplier bills line by line with VAT, and a bill without a purchase order waits for approval before it posts. Recording each levy demand as a bill, from the authority that issued it, gives you a list of what was demanded, what was paid and from which account.

Watch the VAT field. Achekam's supplier bills do not yet use a Nigerian business's own VAT rate: they offer 15% or 0% and default to 15%. Unless the demand itself shows VAT, set every levy line to 0% before you save the bill. Left at the default, the bill would record input VAT that does not exist.

Achekam lists every State Internal Revenue Service but leaves every State filing and payment to the State's own channel. You pay the levy through the LIRS or council's own process; Achekam records it.

Budgeting for renewals and keeping receipts

A business can set a budget per account and period in Achekam and compare it with actual figures from its ledger. Put the premises levy for each site, and any council rates, into a "rates and levies" budget for the month the renewal usually falls due. A gap between budget and actual then shows either a renewal you have not paid or a demand you did not expect.

Then keep the proof:

1. One receipt per site, per year, filed by address.
2. The registration receipt for each site, kept permanently.
3. A copy at each premises, so staff can produce it during an inspection.
4. A note of the area classification for each site, with whatever the LIRS or ministry told you.
5. Council demands and receipts kept separately from State ones.

Add the renewal month to your tax calendar. If you run a hotel, bar, restaurant or event centre, the Lagos consumption tax is a much larger monthly obligation; see Lagos hotel and restaurant consumption tax.

General guidance only, not advice on your own circumstances. Tax and payroll rules change: check the current position with the authority or your adviser.