Let’s be honest: in Nigeria, nobody likes “extra” expenses. Between the price of fuel, the fluctuating Naira, and that one relative who always has a “medical emergency,” the last thing you want is a ₦100,000 fine from the government because you “forgot” to file taxes.
But here is the real gist: the days of “they won’t find me” are over. With the new Nigeria Tax Act (NTA) 2025 effective January 1, 2026 and the way your NIN is now linked to everything from your OPay account to your GTB or Kuda app, the taxman is seeing everything. Whether you are a “9-to-5er,” a freelancer getting paid in dollars, a landlord, or a big-time CEO, we will covers everything you need to file correctly, avoid penalties, and stay on the right side of the law.
What You Need to Know
- The Deadline: March 31st every year. For 2026, you are filing for your 2025 income year.
- Who Files: Every person earning money in Nigeria even if your company already deducts PAYE.
- Where to File: Your state of residence (where you sleep), not necessarily where your office is.
- The Good News: If you earn ₦800,000 or less in taxable income after reliefs, you pay 0% tax.
- The Big Risk: Late filing starts at a ₦100,000 fine. No stories.
What is Personal Income Tax and Who Collects It?
Personal Income Tax (PIT) is Nigeria’s primary tax on individual income. Unlike corporate tax, which is handled federally, PIT is administered at the state level by each State’s Internal Revenue Service (SIRS). The key rule: your tax is determined by your state of residence, not where you work or where your income is earned.
Notable exceptions include residents of the Federal Capital Territory (FCT), who file with the FCT-IRS, as well as certain federal government employees, armed forces personnel in non-civilian roles, and non-residents who earn income from Nigerian sources now handled by the Nigeria Revenue Service (NRS, formerly FIRS).
PIT covers all sources of income: salaries and emoluments (including PAYE), business profits, rents, dividends, interest, capital gains, freelance earnings, pensions, annuities, digital assets, prizes, and winnings. Residents are taxed on worldwide income; non-residents only on Nigerian-source income.
Wait, I Pay PAYE Already Why Am I Still Filing?
This is where many Nigerians get it wrong. You see that monthly deduction on your payslip? That is just your employer helping the government “hold” your money on your behalf.
But you are still legally required to file a Self-Assessment Return by March 31st every year.
Why? Because your employer does not know about your side hustle, the rent you collected from that shop in Dugbe, or the dividends you got from your stocks. Filing is how you tell your State Internal Revenue Service your full story. More importantly, it is the only way to legally claim the reliefs that reduce the amount of tax you actually pay.
The NTA 2025 and NTAA 2025 make this even clearer individual filing is now an explicit, enforceable obligation, not an optional extra.
Key Legal Changes Under the NTA 2025
The Nigeria Tax Act (NTA) 2025 and the Nigeria Tax Administration Act (NTAA) 2025, both effective January 1, 2026, consolidated and modernised the rules previously under the Personal Income Tax Act (PITA). Here is what changed:
- A more progressive tax structure with a higher exemption threshold for low earners and a top rate of 25% for high earners.
- Replacement of the old Consolidated Relief Allowance (CRA) with a targeted rent relief for renters.
- Stronger digital compliance, mandatory TIN-NIN linkage, and expanded enforcement powers.
- Capital gains are now taxed under PIT progressive rates (up to 25%) no longer a flat 10%.
- Gratuity is now fully taxable. The old CRA is gone.
- Stiffer penalties and clearer filing obligations for everyone, including salaried employees.
Note: The March 31, 2026 deadline covers your 2025 income year. These new rules and penalties are not “coming soon” they apply right now.
The New Tax Rates: Who Pays What?
Under the 2025 reforms, the government shifted the goalposts. The system is now properly progressive meaning the more you hammer, the more you contribute. Here is the full breakdown:
| Annual Taxable Income Band | Rate |
| First ₦800,000 | 0% Tax-Free Zone! |
| Next ₦2,200,000 (₦800,001 – ₦3,000,000) | 15% |
| Next ₦9,000,000 (₦3,000,001 – ₦12,000,000) | 18% |
| Next ₦13,000,000 (₦12,000,001 – ₦25,000,000) | 21% |
| Next ₦25,000,000 (₦25,000,001 – ₦50,000,000) | 23% |
| Above ₦50,000,000 | 25% |
If you are a high-flyer earning over ₦50 million, your top rate has moved to 25%. On the flip side, the “common man” earning low income is now better protected with a genuine 0% band.
Example Calculation
Consider a salaried earner with additional rental income for the 2025/2026 period:
- Gross salary: ₦5,000,000
- Rental income: ₦1,200,000
- Total gross income: ₦6,200,000
- Minus rent relief (20% of ₦1.2m rent paid, max ₦500,000): −₦240,000
- Minus pension/NHF/NHIS contributions: −₦300,000
- Taxable income: ≈ ₦5,660,000
- First ₦800,000 @ 0% = ₦0
- Next ₦2.2m @ 15% = ₦330,000
- Remaining ₦2.66m @ 18% ≈ ₦478,800
- Total tax due (before PAYE credit): ≈ ₦808,800
Any PAYE already withheld by your employer during the year is credited against this. You only pay the balance or receive a refund if you overpaid.
How to Legally Pay Less Tax
The old Consolidated Relief Allowance (CRA) is gone. In its place are some new and useful options. If you want to keep more of your hard-earned money, pay close attention to these:
- Rent Relief (The MVP): If you are a tenant not a landlord living in your own house you can claim 20% of the rent you paid, up to a maximum of ₦500,000 per year. So if you paid ₦1.5 million for a flat in Lekki or Gwarimpa, you can use a chunk of that to lower your taxable income. Keep your receipts and tenancy agreement ready.
- Pension & Insurance: Your contributions to your Pension Fund Administrator (PFA), National Housing Fund (NHF), and National Health Insurance Scheme (NHIS) are all fully tax-deductible.
- Mortgage Interest: Interest on a loan taken for an owner-occupied residential property also qualifies as a relief.
- Business Expenses (for freelancers and hustlers): You can deduct expenses that were wholly and exclusively used to generate your income data subscriptions, generator fuel used for work, office space, and similar costs all count. The old “reasonable/necessary” test has been removed under the NTA 2025, making this cleaner and clearer.
- Benefits-in-kind: These now have defined valuation rules employer-provided assets are capped at 5% of cost per year.
Important: Gratuity is now fully taxable. The old CRA no longer exists. Do not apply outdated reliefs from previous tax years it could trigger an audit flag.
Digital Assets and Multiple Income Streams
So you have been trading Solana on the side? Getting YouTube checks in dollars? Running an online store? Under the new NTA 2025, digital assets are now clearly and explicitly taxable. And because the Nigeria Revenue Service is getting smarter with tracking inflows into local bank accounts, it is better to declare everything upfront.
If you try to hide ₦10 million in crypto gains and they catch you during an audit, the penalty will swallow the profit and then some.
Insider tip: If you have multiple streams of income, do not just dump one big figure into the portal. Itemise them salary, rental income, freelance earnings, dividends separately. It makes you look organised and far less likely to trigger a red flag for a manual audit.
Step-by-Step: How to File Like a Boss
You do not need to go and “carry chair” at the tax office anymore. Most states have gone digital. The filing deadline for your 2025 income year is March 31, 2026.
Step 1 Identify Your Tax Authority
If you live in Ikeja, your tax authority is LIRS (Lagos). If you live in Garki, it is FCT-IRS. Even if your office is in Lagos but you live in Opic (Ogun State), you file with OGIRS Ogun State Internal Revenue Service. Where you sleep determines where you file.
Step 2 Get Your TIN/NIN Ready
Your Tax Identification Number (TIN) is now essentially tied to your NIN. If you do not have a TIN, go to the Joint Tax Board (JTB) portal online it is free. Do not let anyone “charge” you ₦5,000 for it at a cybercafé.
Step 3 Gather Your Evidence
Collect your payslips, bank statements showing that side-hustle alert, rent receipts, investment statements, and your pension statement. If you are self-employed, prepare a simple Profit & Loss account. Keep all documents for at least six years that is the audit window.
Step 4 Log Into Your State’s Portal
- Lagos: etax.lirs.net
- Abuja (FCT): fcttaxportal.fctirs.gov.ng
- Most other states have similar portals now. Look for “Personal Income Tax / Annual Return” or “Form A.”
Step 5 Fill the Form and Upload
Enter your total income from all sources salary, side hustle, rent, dividends, everything. Declare your reliefs (that rent relief is important do not skip it). The portal usually calculates your tax automatically once you input the figures correctly.
Step 6 Pay the Balance (If Any)
Input your PAYE amount already deducted by your employer. If there is a balance remaining perhaps because of your side hustle income pay it via Remita or directly on the portal. Save your payment confirmation.
Step 7 Download Your Receipt and Apply for a TCC
Once done, download your acknowledgment receipt immediately. This is what you will use to apply for your Tax Clearance Certificate (TCC) which you will need for visa applications, government contracts, high-level bank loans, and more.
Pro tip: Start filing in January or February. Do not wait until March 30th when the website will start “spinning” because 20 million Nigerians are trying to log in at the same time.
What Happens If You Default?
The government is not playing this year. The penalties under the NTAA 2025 are serious:
- Late filing: ₦100,000 for the first month. Then ₦50,000 for every additional month you delay. Do the maths if you wait six months, you are already owing ₦350,000 in penalties alone, even if your actual tax bill was just ₦20,000.
- Late payment: Interest at the CBN monetary policy rate, plus an additional penalty of 10% or more of the outstanding tax due.
- False declaration: If you claim you are earning ₦2 million when you are actually balling with ₦20 million, you could face up to ₦1,000,000 in fines or 3 years in prison or both.
- Failure to register or notify: Additional penalties of ₦50,000–₦100,000 for failing to register a TIN or notify the IRS of an address change.
Beyond the fines, non-compliance also means: tax audits, possible bank account freezes, and no Tax Clearance Certificate meaning no government contracts, no national cake.
Frequently Asked Questions
Yes, absolutely. PAYE only covers your employment income. You are personally required to file an annual self-assessment return declaring all income sources and claiming your reliefs. No exceptions.
You file in your state of residence only, regardless of where the income was earned. All income goes into one return with your home state’s IRS.
Generally yes most state portals allow amendments before the deadline, and after the deadline with IRS approval. Reach out to your state IRS directly if you need to make a correction.
You are still required to maintain records and file. Under the NTA 2025, informal businesses face increased audit risk due to expanded digital tracking. A simple income and expense record is better than nothing start one now if you have not already.
Contact your state IRS helpline directly, visit the JTB portal at jtb.gov.ng, or engage a licensed tax consultant especially if you have multiple income streams, crypto income, or complex financial arrangements.
What You Should Do Right Now
- Go to your PFA app and download your 2025 pension statement.
- Snap a picture of your 2025 rent receipt and save it somewhere safe.
- Set a reminder for February 1st to log into your state’s tax portal.
- If you have side income, start listing all your income sources now so nothing catches you off guard.
Filing your taxes is adulting 101 in 2026 Nigeria. Do it early, do it right, and stay out of trouble.
