With only a few hours left before the March 31 deadline, many taxpayers in Nigeria remain uncertain about how to file their personal income tax returns and comply with legal requirements.
Under the Nigeria Tax Act 2025, every individual earning income in the country is required to file an annual tax return covering earnings from the previous year.
Earlier in January, the Minister of State for Finance and former Chairman of the Presidential Committee on Fiscal Policy and Tax Reforms, Taiwo Oyedele, urged Nigerians to submit their annual tax returns before the deadline.
Oyedele stressed that both employers and individuals must comply with the law. He added that individual taxpayers are also required to file their self-assessment, noting that compliance remains very low.
He explained that the tax reforms clarify that employees cannot assume their obligations end once employers deduct taxes from their salaries.
Below is a guide to help taxpayers understand the process and meet the requirements.
Understand your tax category
Personal Income Tax is administered by the State Internal Revenue Service in the state where an individual resides, not necessarily their state of origin.
For salaried employees, taxes are usually deducted through the Pay-As-You-Earn system. However, filing an annual return is still encouraged in many states for record purposes, verification of deductions, and obtaining a Tax Clearance Certificate.
For self-employed individuals, freelancers, traders, and business owners, filing is compulsory because they are responsible for declaring and calculating their taxes.
Get your Tax Identification Number
Before filing, taxpayers must obtain a Tax Identification Number, which serves as a unique identifier for all tax-related activities.
The TIN can be generated online using the National Identification Number or obtained through the Federal Inland Revenue Service or the relevant state tax authority.
Determine your total income
Taxpayers are required to declare all sources of income earned within the year. These include salaries and wages, business or professional income, freelance or consulting earnings, rental income, dividends, interest income, and foreign income where applicable.
After calculating total income, allowable deductions and reliefs are applied to determine taxable income. Nigeria operates a progressive tax system, with the first ₦800,000 of taxable income taxed at zero percent.
Prepare and file your return
Tax returns must show total income, deductions or reliefs, and tax payable. Filing can be done online through the relevant State Internal Revenue Service portal or physically at designated tax offices.
Each state runs its own platform, and taxpayers must file with the authority in their state of residence. During the process, individuals are required to provide accurate personal details, employment information, and a breakdown of income sources.
Claim reliefs and deductions
Under the Nigeria Tax Act 2025, which took effect on January 1, 2026, the Consolidated Relief Allowance has been abolished.
In its place, taxpayers who pay rent can claim rent relief calculated as the lower of ₦500,000 or 20 percent of the actual annual rent paid. This claim requires proper declaration and supporting evidence.
Other allowable deductions, including pension contributions and National Housing Fund contributions, remain valid but must be backed by documentation.
Submit before the deadline
The statutory deadline for filing personal income tax returns is March 31 each year, covering income earned in the previous calendar year.
Failure to file within the stipulated period may attract penalties, including fines and additional charges depending on the duration of default and applicable state regulations.
Tax authorities advise taxpayers to file early to avoid delays on online portals and allow time to resolve any issues.
Who must file tax returns
Employees under PAYE may still need to file returns in certain situations. These include earning additional income beyond salary, running a business or professional practice, having multiple sources of income, or changing employers during the year.
Self-employed individuals and those with mixed income streams are required to file returns to ensure proper tax assessment.
Documents required for filing
Taxpayers are advised to prepare necessary documents in advance to ensure a smooth filing process. These include a Tax Identification Number, valid identification, payslips or income statements, bank statements, records of business or freelance income, and evidence of deductions such as pension contributions.
Proof of rent payment is also required for those claiming rent relief. Previous tax filing receipts may also be needed where applicable.
After submission
Once a return is filed, taxpayers usually receive an acknowledgement. The State Internal Revenue Service may accept the submission as filed or review it and issue an assessment where necessary.
Taxpayers also have the right to object to any assessment they disagree with within the legally specified timeframe.
Why compliance matters
Filing tax returns is a legal obligation for all income earners in Nigeria. Beyond avoiding penalties, compliance is often required to access services such as government contracts, loans, visa applications, and other official processes that require a Tax Clearance Certificate.
As the March 31 deadline approaches, taxpayers are advised to prepare their documents and complete their filings to avoid penalties.
