As the March 31 deadline for filing personal income tax returns approaches, many Nigerians are still unclear about the proper steps to meet their tax obligations under the law.
According to the Nigeria Tax Act 2025, all individuals earning income in Nigeria must file an annual tax return covering earnings from the previous year.
Earlier this year, the Minister of State for Finance, Taiwo Oyedele, urged citizens to complete their returns on time, stressing that compliance is required not only from employers but also from individuals who must submit self-assessment forms. He noted that many taxpayers incorrectly assume their obligations end once taxes are deducted from their salaries under the Pay-As-You-Earn (PAYE) system.
Here’s a step-by-step guide to help Nigerians file their returns before the deadline:
- Identify Your Tax Category
Personal Income Tax is administered by the State Internal Revenue Service where you reside, not necessarily your state of origin.
Salaried employees: Although taxes are deducted from salaries through PAYE, filing an annual return is still encouraged to verify deductions, maintain records, and obtain a Tax Clearance Certificate.
Self-employed individuals and business owners: Filing is mandatory, as they are responsible for declaring and calculating their own taxes.
- Obtain a Tax Identification Number (TIN)
A TIN is required to file tax returns. It can be generated online using your National Identification Number or obtained through the Federal Inland Revenue Service or the state tax authority.
- Calculate Total Income
Taxpayers must report all income sources, including:
- Salaries and wages
- Freelance or consulting earnings
- Business or professional income
- Rental income
- Dividends, interest, and foreign earnings
After accounting for allowable deductions and reliefs, the taxable income is determined. Under the new law, the first ₦800,000 of taxable income is exempt from tax.
- Prepare and Submit Your Tax Return
Returns must show total income, deductions, and tax payable. Filing can be done online via your state’s tax portal or in person at a tax office. Each state has its own platform, so ensure you file with the correct authority based on your residence.
- Apply Deductions and Reliefs
The Nigeria Tax Act 2025 replaced the Consolidated Relief Allowance with new reliefs. For example, taxpayers who pay rent can claim a relief equal to the lower of ₦500,000 or 20% of annual rent, provided proof of payment is submitted. Pension contributions and National Housing Fund contributions remain deductible with proper documentation.
- Meet the Deadline
March 31 is the statutory cut-off for filing returns for the previous year’s income. Late filing may lead to penalties, fines, or additional charges, depending on the state. Filing early is recommended to avoid technical delays or complications.
- Who Needs to File
Even employees under PAYE may need to file returns if they:
- Earn income beyond their salary (e.g., freelance work, rent)
- Operate a business or professional practice
- Have multiple income streams
- Change employers during the year
- Self-employed individuals and those with mixed income sources must file returns to ensure accurate tax assessment.
- Documents to Prepare
To make filing easier, gather:
- TIN and valid identification
- Payslips, income statements, or bank records
- Proof of freelance or business income
- Documentation for deductions (pension, insurance, rent)
- Previous tax receipts, if applicable
- After Filing
Once submitted, taxpayers receive an acknowledgement from the tax authority. The authority may accept the filing or issue an assessment, which can be contested within a specified timeframe if discrepancies arise.
- Why Timely Filing Matters
Filing tax returns is a legal responsibility. Compliance ensures you avoid penalties and is often required to access services such as government contracts, loans, visa applications, or obtaining a Tax Clearance Certificate.
With the March 31 deadline approaching, Nigerians are encouraged to prepare all necessary documents and submit their returns promptly to avoid unnecessary fines and ensure compliance.