What a late Nigerian tax return costs
The penalties and interest a Nigerian business faces for a late or incorrect return or late tax payment under the 2025 Act, and habits that avoid them.
By Achekam · · 4 min read · For Running a business businesses in Nigeria
Late tax returns used to be something many Nigerian businesses treated as negotiable. The Nigeria Tax Administration Act 2025 makes the cost of lateness plain, fixed and recurring: a set amount for the first month, another for every month after, and a separate penalty with interest when the tax itself is paid late.
The amounts are large enough to hurt a small business and they apply to returns that many owners do not think of as real returns, such as a nil VAT return or the annual return of a company that pays no company income tax. This article sets out the penalties at the time of writing, which returns they reach, and the habits that keep a business clear of them.
The first month and each month after
A late Nigerian return costs N100,000 for the first month and N50,000 for each month after.
A worked example in words. A VAT return due on the 21st is filed three months late. The first month costs N100,000. The second and third months cost N50,000 each. The penalty for that one return is N200,000, before any question of the tax itself.
The penalty attaches to each return. A business that misses three monthly VAT returns in a row faces three separate penalties, each growing with its own lateness.
Late payment: a penalty plus interest
Paying the tax late is a separate failure from filing late. Late payment attracts a 10% penalty plus interest. The interest runs at the Central Bank of Nigeria's monetary policy rate plus a spread, so it moves when the policy rate moves.
A return filed on time with the tax paid late still triggers the payment penalty and interest. A return filed late with the tax paid late triggers both the filing penalty and the payment penalty. The cheapest position is the obvious one: file and pay by the due date.
Withholding tax has its own rules
Withholding tax carries its own consequences. Withholding tax not remitted to the NRS by the 21st of the following month attracts 10% a year plus interest, and failing to deduct it in the first place attracts a 40% penalty. The second figure is the one that surprises people: a forgotten deduction on a supplier's invoice is penalised far more heavily than a late remittance. State revenue services' remittance dates for withholding tax are uncertain in the research, so check with the State if you withhold on its behalf.
Incorrect returns are treated like late ones
The same N100,000 and N50,000 penalties apply to an incorrect return as to a late one. Filing on time is therefore not enough; the return has to be right. A VAT return built from unreconciled books, or a company return that leaves out a source of income, can attract the same penalty as one filed months after the deadline.
The NRS's page on penalties and sanctions describes the kinds of non-compliance it penalises (late filing, late payment, failure to register, false declarations) and practical steps to avoid penalties, such as keeping accurate records.
Nil and small-company returns count too
Two kinds of return are easy to forget because they seem to carry no tax:
- Nil VAT returns. A Nigerian VAT return, including a nil return, is due on or before the 21st of the following month. A registered business with no sales in a month still files. Nil returns are covered in more detail in VAT return due dates and nil returns.
- Small and exempt companies' annual returns. Every Nigerian company, including a small or exempt one, must file an annual self-assessment return. For a company in business more than 18 months, it is due within 6 months after the year end. Paying 0% company income tax does not remove the duty to file; see why a small Nigerian company still files a tax return.
Employers have a yearly date too: the annual employer return for the previous year is due by 31 January. (Lagos extended the 2026 deadline once, to 7 February; do not assume it will again.)
Deadlines Achekam computes and those it leaves out
Achekam's filing calendar for Nigerian businesses works from approved rules, and it leaves out any deadline whose rule is awaiting approval or contested, saying why. One Nigerian date is contested in that sense: the PAYE remittance day. Achekam does not use it until one platform administrator chooses a candidate with a reason and a different administrator approves it.
So an empty slot in the calendar is not permission to relax. It means Achekam will not state that date yet. For PAYE in particular, confirm the remittance date with the State revenue service your employees' tax goes to, and put it in your own calendar. The full set of dates is gathered in a Nigerian business's tax calendar.
Habits that keep returns on time
- List every return you file, monthly and yearly, including nil returns and the annual company return.
- Set the internal deadline a week early, so that a slow portal or a missing document does not push you past the 21st.
- Reconcile before you file. A return built from reconciled books is less likely to be incorrect.
- File and pay together, so the payment penalty never arises on a return filed on time.
- Withhold at the time of payment, not later, and remit by the 21st.
- Record each filing and payment with the receipt, and have someone else check it.
- Review the list each quarter against any change from the NRS or your State.
If a return is already late, file it now. Every further month adds N50,000.
General guidance only, not advice on your own circumstances. Tax and payroll rules change: check the current position with the authority or your adviser.
