With critical deadlines fast approaching, Nigeria’s Federal Government has issued a firm reminder to employers and individuals: paying taxes through deductions or direct remittances does not fulfil your legal obligation — you must also file annual tax returns.
Taiwo Oyedele, Chairman of the Presidential Committee on Fiscal Policy and Tax Reforms, sounded the alarm during a recent webinar for HR managers, chief financial officers, and tax professionals. He revealed that in many states, fewer than 5% of eligible taxpayers are submitting annual returns — a compliance rate he described as “alarmingly low.”
“Paying tax is not the same as filing tax returns,” Oyedele stressed. “Many people assume that once PAYE deductions are made from their salaries, they are done. That is incorrect. The law requires both employers and employees to file annual returns.”
For employers, the deadline to submit annual returns for employees is January 31, 2026. Self-employed individuals and those required to file self-assessment returns have until March 31, 2026. Missing these dates can trigger penalties, audits, and reputational damage.
Filing returns is more than administrative paperwork — it is a mandatory disclosure that enables tax authorities to verify compliance, identify under-reporting, and ensure fairness across the system. The obligation applies to everyone, including low-income earners, businesses enjoying tax incentives or exemptions, and organisations with special concessions. Even those with zero taxable income must declare their status and claim any exemptions.
Oyedele acknowledged that low compliance stems partly from lack of awareness and perceived complexity rather than widespread deliberate evasion. To address this, the Federal Government, through the Joint Revenue Board and state revenue services, is working to simplify filing processes, improve digital platforms, and increase public education.
The low filing rates — over 90% non-compliance in many states — represent a major challenge for the tax reform agenda, which aims to increase transparency, widen the tax net, and build public trust. Non-compliance carries real risks, including penalties and heightened scrutiny from authorities.
Oyedele urged employers and individuals to act promptly. Filing returns not only keeps taxpayers compliant but also helps individuals track their earnings, deductions, and potential liabilities. For businesses, timely filing supports accurate payroll management and avoids costly sanctions.
“The goal is not punishment,” Oyedele concluded. “It is about building a culture of responsibility, transparency, and trust between citizens and government.”
As the January 31 employer deadline approaches and the March 31 individual deadline follows, tax professionals are advising immediate action: review records, gather necessary documents, and file promptly to avoid penalties. With reforms aimed at modernising and broadening Nigeria’s tax system, staying compliant has never been more important.
