As the March 31 deadline draws closer, many Nigerians are still unsure about the proper steps for submitting their personal income tax returns and meeting statutory obligations.
According to the Nigeria Tax Act 2025, all individuals who earn income within the country are expected to submit yearly tax returns detailing earnings from the previous year. However, compliance levels remain relatively low.
Earlier in the year, the Minister of State for Finance, Taiwo Oyedele, who also served as the former Chairman of the Presidential Committee on Fiscal Policy and Tax Reforms, called on citizens to fulfill their tax responsibilities before the closing date. He emphasized that the law places obligations on both employers and employees.
He explained that although taxes are deducted from workers’ salaries under the Pay-As-You-Earn (PAYE) system, individuals are still required to independently submit their returns and, where necessary, carry out self-evaluation of their income.
The updated tax framework makes it clear that salary deductions alone do not exempt taxpayers from further responsibilities, especially for those with additional earnings.
Personal income tax administration is handled by the State Internal Revenue Service in the state where a person lives. While employees often have taxes deducted automatically, submitting annual returns may still be necessary for documentation and to obtain a Tax Clearance Certificate. Meanwhile, self-employed individuals, business owners, traders, and freelancers are mandated to declare and compute their earnings themselves.
Before filing, taxpayers are required to obtain a Tax Identification Number (TIN), which serves as a unique reference for all tax transactions. They must also disclose all sources of income, including wages, business profits, consultancy earnings, rental income, dividends, interest, and any foreign earnings where applicable.
Nigeria operates a progressive tax system, and under the revised structure, the first ₦800,000 of taxable income is exempt from tax.
In addition, the Nigeria Tax Act 2025, which came into effect on January 1, 2026, removed the Consolidated Relief Allowance and introduced a rent-based relief. This allows taxpayers to claim either ₦500,000 or 20 percent of their annual rent—whichever is lower—provided proper evidence is submitted. Other deductions, such as pension contributions and National Housing Fund payments, remain valid with supporting documentation.
Tax returns can be submitted electronically through state tax portals or physically at designated tax offices, depending on the taxpayer’s location. Authorities have encouraged early filing to avoid last-minute technical issues and congestion.
Failure to meet the March 31 deadline may result in penalties, including fines and additional charges, depending on how long the delay persists and the applicable state regulations.
Experts also note that workers under PAYE may still need to file returns if they earn income beyond their salaries, operate businesses, have multiple income streams, or changed jobs within the year.
To ensure a seamless process, taxpayers are advised to gather necessary documents such as their TIN, valid identification, income records, bank statements, proof of deductions, and evidence of rent payments where applicable.
Once returns are submitted, taxpayers receive confirmation from the State Internal Revenue Service. The authority may either accept the submission or review it and issue an assessment. Where disagreements arise, taxpayers have the right to contest the assessment within the stipulated timeframe.
Beyond legal compliance, filing tax returns is essential for accessing services such as government contracts, financial loans, and visa processing, all of which often require a valid Tax Clearance Certificate.
With the deadline fast approaching, taxpayers are being urged to act promptly to avoid sanctions and ensure full compliance.