Enhancing Tax Compliance – Sunmola David & CO

TAX ADVISORY NOTICE FOR BUSINESSES AND INDIVIDUALS IN NIGERIA 2026

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.

Enhancing Tax Compliance: Digitization Efforts in the Nigeria Finance Act 2023

Leave a Comment / TAX SERVICES / Lawson Lawson

Introduction: Tax compliance is a crucial aspect of a well-functioning economy, enabling governments to collect revenues efficiently and fund public services. Recognizing the significance of tax compliance, the Nigeria Finance Act 2023 introduces a series of digitization efforts aimed at modernizing tax administration and improving compliance measures. As a reputable accounting firm in Nigeria, we explore the key digitization initiatives in the Finance Act 2023 and their potential impact on tax compliance and revenue generation. 1. Electronic Tax Filing and Payment: The Finance Act 2023 emphasizes the adoption of electronic tax filing and payment systems. This initiative replaces traditional paper-based processes with online platforms, allowing taxpayers to file tax returns and make payments electronically. Electronic tax filing and payment enhance convenience for taxpayers, reduce administrative burdens, and minimize errors, leading to more accurate and timely tax reporting. 2. Digital Tax Assessment and Audits: With the aim of increasing efficiency and transparency, the Finance Act 2023 introduces digital tax assessment and audits. Tax authorities will utilize data analytics and artificial intelligence to assess tax liabilities and conduct audits with greater precision and effectiveness. Digital tax assessment enables tax authorities to identify high-risk cases and non-compliant taxpayers more efficiently, promoting fair tax treatment for all. 3. Online Taxpayer Portals: The Act promotes the development of online taxpayer portals, providing taxpayers with secure and personalized access to their tax information. Through these portals, taxpayers can view their tax liabilities, payment history, and correspondence with tax authorities. Online taxpayer portals empower individuals and businesses to stay informed about their tax obligations, reducing the likelihood of inadvertent non-compliance. 4. Data Exchange and Cooperation: To enhance tax enforcement, the Finance Act 2023 promotes data exchange and cooperation among tax authorities and relevant institutions. It authorizes the Nigerian government to enter into international agreements for the exchange of tax-related information. Data exchange and cooperation enable the tracking of cross-border financial transactions and support the detection of tax evasion and aggressive tax planning. 5. Whistleblower Protection: The Act provides robust protection for whistleblowers who report tax fraud and non-compliance. Whistleblowers are shielded from retaliation and offered incentives or rewards for providing credible information leading to the discovery of tax irregularities. Whistleblower protection encourages individuals with knowledge of tax evasion to come forward, supporting the government’s efforts to combat tax non-compliance. Conclusion: The Nigeria Finance Act 2023 marks a transformative step towards modernizing tax administration and enhancing tax compliance through digitization efforts. By embracing electronic tax filing and payment systems, digital tax assessment and audits, online taxpayer portals, data exchange, and whistleblower protection, the Act fosters a more efficient and transparent tax environment in Nigeria. As a reputable accounting firm in Nigeria, we commend these digitization efforts and encourage taxpayers to leverage the opportunities presented by the Finance Act 2023. By embracing digitization, individuals and businesses can streamline their tax compliance processes, minimize errors, and contribute to a fair and sustainable tax system that benefits both the government and the Nigerian economy as a whole. For professional advice on Accountancy, Transfer Pricing, Tax, Assurance, Outsourcing, Company Registration, and CAC matters, please contact Sunmola David & CO (Chartered Accountants & Tax Practitioners) at www.sunmoladavid.com. You can also reach us via WhatsApp at +2348038460036.

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