When a Nigerian business is owed a tax refund
When the NRS refund guidelines say a Nigerian business is owed a tax refund, the six-year limit, and how refunds are paid or set off.
By Achekam · · 4 min read · For Running a business businesses in Nigeria
Most Nigerian businesses think of tax as money that only flows one way. Yet overpayments happen: a payment made twice when two people each thought the other had forgotten, withholding tax deducted at the wrong rate, VAT charged on a supply that should not have carried it. Each one is money the business is entitled to ask for back, if it notices in time and can prove it.
This article sets out the situations the NRS's refund guidelines recognise, the time limit, how and when the NRS pays, the deductions it makes first, and how your own records can show an overpayment clearly enough to support a claim.
The cases the NRS refund guidelines list
The NRS's Guidelines on Tax Refund, Information Circular No. 2026/17 published on 29 June 2026, say a taxpayer is eligible for a refund where, among other cases:
- tax paid exceeds the amount due for the year of assessment;
- tax was overpaid through an assessment error;
- tax was paid twice, or paid in error;
- input VAT exceeds output VAT;
- VAT was charged and remitted on zero-rated and exempt supplies;
- withholding tax was remitted at rates higher than the statutory rates.
"Among other cases" matters: the list is not exhaustive, so a situation that does not fit neatly may still qualify. Ask your adviser.
The VAT cases deserve a word. Input VAT can exceed output VAT in a month when a business buys far more than it sells. Whether to claim it back or carry it forward is its own decision, covered in VAT refund or carry forward.
The NRS publishes the refund guidelines on its tax guides page, alongside its other current guidelines and circulars, including those on withholding of VAT, virtual assets and advance rulings.
Six years from the end of the year of assessment
The guidelines say no refund claim will be allowed unless it is made within six years after the end of the relevant year of assessment. That is a long window, but not an endless one, and an overpayment is often noticed only when someone reviews old files.
If you suspect an overpayment in an older year, check the date before anything else. A claim that is strong on the evidence but out of time will not be allowed.
Paid within 90 days, or set off
For refunds other than VAT, the NRS says a refund due must be settled within 90 days of the relevant tax authority's decision, or the amount applied as a set-off against the taxpayer's tax liability. When a cash refund is paid, the guidelines say it goes through an e-payment platform to the taxpayer's nominated account.
So a refund does not always arrive as cash. It may be used to settle tax you owe. Plan your cash flow on that basis, and do not count a refund as cash in the bank until it is.
Outstanding liabilities recovered first
The NRS says it will recover all outstanding tax liabilities from a refundable amount, whatever tax type produced the refund, and then pay the balance to the beneficiary or use it as a set-off against future liabilities.
A business owed a withholding tax refund but behind on its VAT, for example, should expect the VAT arrears to come out of the refund first. Clearing or agreeing outstanding balances before claiming can make the outcome easier to predict.
Proving an overpayment from your records
An overpayment claim stands or falls on evidence: what the business owed, what it paid, and when. Three parts of Achekam help you show it.
The tax payments themselves. Achekam records each Nigerian tax payment with the authority's own reference and receipt, an RRR or DIN. It never invents a payment reference, and every payment needs a second person to confirm it. A duplicate payment shows up as two confirmed records with two references for the same tax and period.
The bank lines. Bank statement lines are matched by suggestion, and a person accepts each match. A line not yet in the books becomes a suggested journal for a person to approve, and a reconciliation completes only when every line agrees or every leftover line is explained. A tax debit on the statement with no matching tax return is worth a second look.
The ledger. The general ledger lists every posted line, and the trial balance shows each account for a period or at a date and whether debits equal credits. Printing the tax account for the year shows the liability posted and the payments made against it.
A refund review at year end
Before you close each year, run through this short review:
- List every tax payment for the year with its RRR or DIN.
- Compare the total paid for each tax with the liability on the filed returns.
- Look for two payments with the same tax and period.
- Check withholding tax rates applied against the statutory rates.
- Review VAT charged on zero-rated and exempt supplies.
- Note any overpayment, the year, the evidence and the six-year deadline.
How far back the tax authority itself can reach is covered in assessment time limits in Nigeria and Kenya. Once you have found an overpayment, the claim itself has to be made in a set form; prepare it with your adviser.
General guidance only, not advice on your own circumstances. Tax and payroll rules change: check the current position with the authority or your adviser.
