Today, on my way to London, I met with a gentleman. He asked me, "Should we allow our children to lie sometimes?"
"Well!", I said, "lying normally should not be acceptable (except in certain situations like if the child's or somebody's life is not in danger), but when the child lies, the parents, instead of reacting & scolding, should try to handle the situation with patience and self-reflection as to why the child lied in first place."
Children normally lie when they have some kind of insecurities of being open, such as: they will be punished, scolded or hit.
To remove these insecurities or to avoid the situation where they have to lie, children must have someone in their lives (parents, grand-parents, teachers etc.) to whom they can turn if they want. Someone who listens to them and makes them feel comfortable & secure, someone who can teach them to learn from their mistakes, and who loves the child unconditionally. Once they feel secure and comfortable, children will feel less need to lie, and more motivated to present the truth (which in turn will make them more confident, as lying always brings some disharmony within oneself).