With the March 31 deadline only hours away, many Nigerian taxpayers remain uncertain about how to file their personal income tax returns and meet legal obligations.
Under the Nigeria Tax Act 2025, every person earning an income in the country must file an annual return covering their earnings from the previous year.
In January, the Minister of State for Finance, Taiwo Oyedele, urged citizens to complete their filings before the end of March.
He emphasized that both employers and individuals are legally bound to comply, noting that “individual taxpayers must also file their self-assessment,” and pointing out that “compliance in this area remains very low.”
He further clarified that employees should not assume their responsibilities are over just because taxes are deducted from their paychecks.
To help you navigate the process, here is a detailed guide on what you need to know:
1. Know Your Tax Category
Personal Income Tax is managed by the State Internal Revenue Service (SIRS) where you live, not necessarily your state of origin. While salaried employees have taxes deducted via Pay-As-You-Earn (PAYE), filing an annual return is still encouraged for record-keeping and obtaining a Tax Clearance Certificate. For freelancers, traders, and business owners, filing is “compulsory, as they are responsible for declaring and calculating their own taxes.”
2. Secure Your Tax Identification Number (TIN)
A TIN is mandatory for all tax activities. You can generate one online using your National Identification Number (NIN) through the FIRS or your state’s tax portal.
3. Calculate Your Total Income
Taxpayers must declare all money earned during the year, including:
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Salaries and business income
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Freelance earnings and rental income
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Dividends, interest, and applicable foreign income
Nigeria uses a progressive tax system where the “first ₦800,000 of taxable income is taxed at 0%.”
4. Prepare and File Your Return
You must report your total income and tax payable either through your state’s online SIRS portal or at a physical tax office. You will need to provide accurate personal details and a full breakdown of your income sources.
5. Claim Reliefs and Deductions
Under the Nigeria Tax Act 2025 (effective January 1, 2026), the “Consolidated Relief Allowance has been abolished.” In its place, those who pay rent can claim relief calculated as the “lower of ₦500,000 or 20 per cent of the actual annual rent paid,” provided they offer supporting evidence. Other deductions like pension and National Housing Fund contributions still apply but require documentation.
6. Observe the Deadline
The deadline is March 31 every year. Missing this window “may attract penalties, including fines and additional charges for continued non-compliance,” depending on state regulations. Early filing is advised to avoid portal delays.
7. Who is Required to File?
Beyond standard PAYE employees, you must file if you:
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Earn income outside of your salary (like rent or side gigs)
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Run a professional practice or business
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Changed employers during the year
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Have multiple income streams
8. Required Documents
Prepare these items for a smooth process:
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TIN and a valid ID
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Payslips, bank statements, or business records
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Evidence of pension/insurance contributions
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“Proof of rent paid (for rent relief claim)”
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Previous tax receipts
9. Post-Submission Process
After filing, you will receive an acknowledgement. The tax authority may review your submission and issue an assessment. You have a legal right to object to any assessment you disagree with within a specific timeframe.
10. The Importance of Compliance
Filing is a legal duty. Beyond avoiding fines, tax compliance is often necessary for “accessing services such as government contracts, loans, visa applications, and other official transactions” that require a Tax Clearance Certificate.
