March 21, 2025

Avoid Costly Penalties: Your Complete Guide to Nigeria’s Tax Compliance Guide Prepared by Sunmola David, BSc, MSc, FCA, FCTI Managing Partner, SUNMOLA David & Co (Chartered Accountants and Chartered Tax Practitioners) Contact: +2348038460036 | Website: www.sunmoladavid.com WhatsApp: +2348038460036 Nigerian tax laws require all companies and business names to file yearly tax returns and submit statutory documents. If you fail to comply, the Federal Inland Revenue Service (FIRS) may issue a Best of Judgment (BOJ) assessment against your business. This could result in unnecessary financial penalties. To avoid these problems, business owners must file all required returns on time. A. Federal Inland Revenue Service (FIRS) Tax Returns Both companies and business names must file the following returns with FIRS: Company Income Tax (CIT) – For Companies OnlyCompanies must submit annual tax returns together with their audited financial statements. The deadline for filing is within six months after the end of the company’s financial year. Value Added Tax (VAT) – For Companies and Business NamesBusinesses must file monthly VAT returns using Form 002. This form should include details of input and output VAT. The due date for submission is the 21st of the following month. Withholding Tax (WHT) – For Companies and Business NamesBusinesses must file monthly returns for taxes deducted from payments made to contractors, service providers, and other recipients. The deadline for filing is the 21st of the following month. Education Tax (ET) – For Companies OnlyCompanies must pay 3% of their assessable profit as Education Tax. This tax is filed annually along with the Company Income Tax (CIT) return. National Information Technology Development Levy (NITDL)This levy applies to companies in designated sectors such as banking, telecommunications, and insurance. The amount is calculated as a percentage of profit before tax. Capital Gains Tax (CGT)Businesses must declare and pay Capital Gains Tax on profits made from selling chargeable assets such as land, buildings, or investments. Important Note for Business Name Owners:Business names are not required to pay Company Income Tax (CIT). Instead, the owners must file Direct Self-Assessment Tax under the Personal Income Tax Act (PITA) with the State Inland Revenue Service (SIRS) where they operate. B. Corporate Affairs Commission (CAC) Annual Returns Annual Returns FilingBoth business names and companies must file annual returns using Form CAC 10. The deadline for submission is 42 days after the Annual General Meeting (AGM). Reporting Changes in Company DetailsIf there are any changes in company details—such as directors, shareholders, or registered address—these updates must be reported to CAC immediately. C. State Inland Revenue Service (SIRS) Returns Businesses operating in any Nigerian state must comply with the following requirements: Pay-As-You-Earn (PAYE) ReturnsEmployers must file monthly returns for taxes deducted from employees’ salaries. The deadline for submission is the 10th of the following month. Development LevyThis is an annual levy that applies to all employees and businesses. Business Premises LevyBusinesses must renew their premises levy every year for all registered locations. Direct Assessment (For Sole Proprietors and Business Name Owners)Owners of unincorporated businesses must file personal income tax returns under the Direct Self-Assessment system. D. Nigeria Social Insurance Trust Fund (NSITF) Returns Monthly Pension ContributionsEmployers must remit both employee and employer pension contributions to a Pension Fund Administrator (PFA) every month. The deadline for payment is the 7th of the following month. Pension Compliance CertificateCompanies bidding for government contracts must obtain this certificate to prove compliance with pension laws. E. Nigeria Social Insurance Trust Fund (NSITF) Returns Monthly Employee ContributionsEmployers must make monthly contributions for employee social insurance coverage. The deadline for remittance is the 31st of the following month. F. Industrial Training Fund (ITF) Returns Annual Training ContributionCompanies with five or more employees must pay 1% of their annual payroll costs to the ITF. The payment is due once a year, based on the company’s financial year. G. National Housing Fund (NHF) Returns Monthly Employee and Employer ContributionsEmployees earning ₦3,000 and above must contribute 2.5% of their salary to the NHF. Employers must remit these contributions along with their own portion. The deadline is the 10th of the following month. H. Financial Reporting and Audited Accounts Audited Financial StatementsCompanies must prepare audited financial statements and submit them with their CIT returns and annual CAC filings. Publication of Accounts (For Public Companies Only)Public companies must publish their audited financial statements in at least two national newspapers. For further assistance or professional tax advisory services, please contact SUNMOLA David & Co (Chartered Accountants and Chartered Tax Practitioners). Contact: +2348038460036 | Website: www.sunmoladavid.com WhatsApp: https://wa.me/2348038460036 Click below button to download NIgeria tax return Download the Niegria Yearly tax Please click here to share the page with others Share Now

The Chairman of the Presidential Fiscal Policy and Tax Reforms Committee, Taiwo Oyedele, has highlighted that businesses in Nigeria face one of the highest tax burdens globally. Speaking at a grand reception in Lagos organized by the Student Pye Alumni (Class of 1990–1994), Oyedele revealed that Nigeria ranks among the top 10 countries with the highest corporate tax burdens. He stressed the urgent need for reform, particularly in a country striving to attract both local and foreign investment. The event honored the 60th President of the Institute of Chartered Accountants of Nigeria (ICAN), Chief Davidson Chijioke Alaribe, and the Group Managing Director of First Holdco Plc, Adebowale Oyedeji. According to a statement from the organizers, Student Pye Alumni includes members who are fellows of ICAN and the Chartered Institute of Bankers of Nigeria (CIBN). Delivering a keynote address on “Understanding the Nigeria Tax Reforms,” Oyedele called for collaboration between government agencies and stakeholders on the proposed tax reform bill currently before the National Assembly. He emphasized the importance of allowing tax deductions for startup expenses incurred up to six years before a business begins operations — a move he believes would encourage entrepreneurship and support business growth. “We impose heavy tax burdens on businesses of all sizes,” Oyedele stated. “Nigeria ranks among the top 10 highest in corporate tax globally, yet we desperately need investment. We tax poverty, capital, and investment itself. We even collect taxes in advance, regardless of whether businesses ultimately make a profit.” He advocated for exempting small businesses from certain taxes, reducing the tax burden on larger enterprises, and harmonizing tax structures to drive economic growth and protect low-income earners. He urged all stakeholders to rally behind the bill as a foundation for transforming the Nigerian economy. The event was attended by former school directors and the Commissioner for Finance of Abia State, Uwaoma Ukandu, who represented the Governor of Abia State, Alex Otti. In their closing remarks, the Student Pye Alumni congratulated the honorees and encouraged them to continue demonstrating excellence and resilience. They also called on Micro, Small, and Medium Enterprises (MSMEs) across Nigeria to actively engage in ongoing tax reform discussions. For professional advice on Accountancy, Transfer Pricing, Tax, Assurance, Outsourcing, online accounting support, Company Registration, and CAC matters, please contact Sunmola David & CO (Chartered Accountants & Tax Practitioners) at Lagos, Ogun state Nigeria offices, www.sunmoladavid.com. You can also reach us via WhatsApp at +2348038460036.