6 Key Points on Personal Income Tax

ANNUAL PERSONAL INCOME TAX RETURNS (SELF-ASSESSMENT)Individuals, Professionals & Business Name Owners1️⃣ Correct Statutory DeadlineThe legal filing deadline is:31 March of every year — NOT 30 MarchThis is based on the Personal Income Tax Act requirement that taxpayers file returns within 90 days from the commencement of a new year of assessment.Tax authorities (LIRS, FCT-IRS and others) consistently confirm:All individuals must submit annual tax returns on or before March 31 each year 2️⃣ Who Must File? (Compulsory for Everyone)The annual return is mandatory for:• Employees (PAYE earners)• Sole proprietors / Business name owners• Professionals & freelancers• Informal sector operators (traders, artisans)• Individuals with multiple income sourcesThe return must disclose total income from all sources for the previous year. 3️⃣ Employees Under PAYE — Still Required to FileEven if tax is deducted monthly:PAYE covers only employment income.You must still declare:• Business income• Rent• Consultancy• Side hustle earnings• Investment income• Online income• Foreign incomeIf no additional income exists → No additional tax arisesBut filing remains compulsory. 4️⃣ Business Name Owners — How Tax Is AssessedA registered business name is NOT taxed separately.Legally:The profit of a business name is assessed in the hands of the individual owner.Therefore, the owner must declare:• Business profit• Other personal income• Combined total incomeThis is why it is called Personal Income Tax, not Business Name Tax. 5️⃣ Informal Sector AssessmentsPresumptive assessments (₦20,000 – ₦100,000 levies etc.) are not final taxation.The March filing allows the tax authority to:• determine actual income• regularise assessment• charge additional tax where applicable 6️⃣ Penalties for Failure to FileA. Under Personal Income Tax (Existing Law)Failure to file returns attracts:₦50,000 penalty for individuals B. Under the New Tax Reform / Tax Administration FrameworkThe new regime significantly increases sanctions:• ₦100,000 first month• *₦50,000 each additional month *Also:• False or incomplete returns → ₦50,000 – ₦500,000 fines 7️⃣ Key Practical MeaningThe filing is primarily a declaration obligation, not merely payment.Even if:• You paid PAYE• You paid informal tax• You earned nothing extraYou must still file the annual return. 📅 Filing Deadline31 March 2026 Need Assistance?We can prepare and submit your returns professionally.