LIRS seals Ikeja Shoprite over ‘noncompliance’ with tax obligations

The Lagos State Internal Revenue Service (LIRS) has sealedthe Shoprite outlet at the Ikeja City Mall over alleged failure to meet taxobligations. In a notice spotted at the entrance on Monday,the LIRS said the breach is an offence punishable by fines and imprisonmentunder Section 94 of the Personal Income Tax Act, 2011 (as amended). “Take notice that the owner/occupant of this premises hasfailed to comply with his/her tax obligations under the relevant tax laws,” thenotice reads. “This is a contravention of the law punishable by bothpecuniary penalties and imprisonment pursuant to section 94 of the PersonalIncome Tax Act 2011 as amended.”The service also warned that the seal must not be removedwithout authorisation from the tax authority, noting that doing so is “anoffence punishable by imprisonment”. Enquiries to Shoprite and the Lagos tax authority on thematter were not responded to. In August 2020, Shoprite announced plans to exit theNigerian market after recording a continuous decline in sales. The exit was finalised when Ketron Investment Limited, aspecial purpose vehicle (SPV) Persianas Investment Limited, acquired the retailbrand’s Nigerian operations. Since the deal, the retail outlet appears to be strugglingto keep operations up. In 2024, Shoprite Nigeria shut down its store in Wuse,Abuja, citing the outlet’s “financial situation and the current businessclimate”. On December 16, 2023, the retail business also announced itsdecision to close a major store in Kano over similar reasons. Recently, there have been media reports of empty shelves inseveral outlets and the closure of stores in Ilorin and Ibadan. Shoppers also reported scanty displays with large sectionsof groceries and wines missing at the Ikeja City Mall. However, the Retail Supermarkets Nigeria Limited (RSNL),operators of the Shoprite franchise in Nigeria, has denied reports suggestingthat it is shutting down operations in the country. In a statement, the company said it was undergoing a“comprehensive business model reset” to respond to Nigeria’s current economicrealities. The organisation said 80 percent of its products are nowsourced locally, adding that the new structure is designed to stabiliseoperations and reposition Shoprite for long-term growth.‘MANY RETAIL BUSINESSES ARE STRUGGLING’ Speaking on the matter, Uchenna Uzo, a consumerretail expert, said the company’s struggles reflect broader challenges in theeconomy. “Not only Shoprite, a couple of retail businesses,especially the ones that came from abroad,” he said. “Shoprite is now Nigeria-owned. It is no longer SouthAfrica-owned. They have been struggling, and the struggle is really due to theeconomic situation, the turbulence we have had. “A lot of inflation, high cost of importation of goods, tieddown inventory. They have had a lot of inventory.” Uzo said consumer behaviour has also shifted, with shoppersincreasingly choosing smaller neighbourhood stores over large supermarkets. On the tax issue, the expert acknowledged he is not aware ofthe situation, but said retailers are still adjusting to the new tax regimethat will be implemented in January. “A lot of retail businesses are still adjusting to how thatwill play out. Plus the fact that the way they invoice and the way they reporttheir tax performance is going to be different,” he said. “So, I am not going to say that Shoprite is at fault. Manyretail businesses are in an adjustment period because of the shocks that wehave faced in the economy.” Uzo, however, expressed optimism that the economy willexperience greater stability in the coming months.

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