Filing your tax return in Nigeria is a legal requirement for every income earner. It may seem complex at first, but once you understand the process, it becomes straightforward. Whether you are employed, self-employed or running a business, you are expected to file your annual tax return.
Here is how to do it correctly.
Step 1: Know the Type of Tax You Are Filing
Most individuals deal with Personal Income Tax (PIT), which is handled by your State Internal Revenue Service. If you are employed, your employer may deduct tax through PAYE. However, you are still required to file your return.
If you are self-employed, a freelancer or business owner, you are fully responsible for calculating and filing your taxes.
Step 2: Get Your Tax Identification Number (TIN)
Before you can file your tax return, you must have a Tax Identification Number. This is your unique ID for all tax-related matters.
You can obtain your TIN online using your National Identification Number by visiting taxid.nrs.gov.ng. This is the fastest and most direct method.
Alternatively, you can register through the Federal Inland Revenue Service or your state tax office.
Step 3: Calculate Your Total Income
You need to declare all your income sources. This includes salary, business earnings, freelance income, and any investment returns.
After that, subtract allowable deductions such as pension contributions, National Housing Fund payments and other approved reliefs. This will help you determine your taxable income.
Step 4: Prepare and File Your Tax Return
Your tax return should clearly show your total income, deductions and the tax payable.
You can file your return online through your State Internal Revenue Service portal or submit it physically at a tax office. Each state has its own platform, so ensure you are using the correct one.
Step 5: Submit Before the Deadline
The deadline for filing personal income tax returns in Nigeria is March 31 every year. This covers income earned in the previous year.
Failing to file on time can lead to penalties. You may be charged ₦100,000 for the first month of default and ₦50,000 for each additional month. In some cases, extra charges and interest may apply.
Filing your tax return is not optional. It is a legal obligation, and delaying it can cost more than the tax itself.
