As Nigeria’s March 31 personal income tax (PIT) filing deadline approaches, the country’s newly reformed tax system is facing its first major test, one already marked by widespread confusion among taxpayers.
Individuals, freelancers, and small business owners are grappling with compliance requirements under the evolving framework, with many unsure of what exactly is expected of them.
Speaking on the importance of compliance, Innocent Ohagwa, President of the Chartered Institute of Taxation of Nigeria (CITN), emphasised that filing tax returns is a legal obligation tied to civic responsibility.
The March 31 deadline applies to all taxable individuals under the Personal Income Tax system, including employees, self-employed professionals, and those in the informal sector. Even individuals whose taxes are deducted at source through Pay-As-You-Earn (PAYE) are still required to file annual returns.
Under the Nigeria Tax Administration Act 2025, failure to comply attracts a penalty of N100,000 for the first month and N50,000 for each subsequent month of default. Additional consequences include audit triggers, interest charges, and possible investigations.
Taxpayers are required to file through state-designated e-tax platforms such as the Lagos State Internal Revenue Service portal, submitting documents including income records, PAYE summaries, and identification details like TIN or NIN.
However, experts say the process is exposing structural gaps. Olatunji Abdulrazaq noted instances where businesses received overlapping audit and review notices for the same period, creating duplication and uncertainty.
A key source of confusion is the distinction between personal and company tax obligations. Many taxpayers assume PAYE deductions fully settle their liabilities, only to discover that filing is still mandatory.
The reforms, led by Taiwo Oyedele and implemented by the Nigeria Revenue Service (NRS), are designed to expand the tax net, improve transparency, and boost government revenue.
Central to the overhaul is the rollout of a national electronic invoicing system, already in use by large companies, with medium-sized firms expected to join by July 2026 and small businesses by 2027. However, authorities have clarified that e-invoicing does not replace the requirement for personal income tax filing.
The stakes are high. Nigeria generated N28.3 trillion in revenue in 2025, with non-oil taxes contributing N21.4 trillion. For 2026, the government is targeting N40.7 trillion, an ambitious goal that depends heavily on improved compliance.
According to Zacch Adedeji, the reforms aim to simplify tax processes while ensuring fairness and reducing leakages through digital systems.
Despite these assurances, the gap between policy and practice remains evident. Many taxpayers are still navigating unfamiliar systems while under pressure to meet the deadline and avoid penalties.
Ultimately, the March 31 deadline will not only test the readiness of taxpayers but also the capacity of tax authorities to manage increased filings and resolve confusion, offering a critical early verdict on whether Nigeria’s new tax regime can deliver on its promise of efficiency and transparency.
