Most Nigerian businesses I meet have nothing against paying tax. Tax compliance simply gets deprioritised because although the business is receiving money, it has yet received a letter from any tax office. The plan is usually to sort things out once the business stabilises or once a proper accountant joins. Three years pass without consequence, and by then the habit has hardened.
What Changed
The Nigeria Revenue Service (“NRS”), the federal body that replaced the Federal Inland Revenue Service (“FIRS”), has built Business Intelligence Units into its tax offices nationwide, and those units mine data for businesses that have never filed. Since April, companies have been contacting us after receiving their first ever letters from a tax office. Assessment notices, invitations to file, demands for documents and letters of intent to audit, received by businesses that had been invisible for decades.
The change came from the 2025 reform, which replaced decades of scattered legislation with four Acts. The Nigeria Tax Act (“NTA”) contains the substantive rules, while the Nigeria Tax Administration Act (“NTAA”), the Nigeria Revenue Service (Establishment) Act and the Joint Revenue Board (Establishment) Act rebuild how tax is administered and by whom. The administration Acts commenced on 26 June 2025, with the Nigeria Tax Act following on 1 January 2026 to complete the set.
Your finances are already visible
- 1. Every business registered with the Corporate Affairs Commission now has a Tax ID automatically. You can retrieve yours at taxid.nrs.gov.ng right now, with no application, by typing in your CAC registration number and waiting a few seconds. Section 8 of the NTAA then puts that number to work. Banks, insurers, stockbrokers and other financial institutions must treat a valid Tax ID as a precondition for opening any account or operating an existing one, so running a business account without one is off the table.
- 2.Your bank also reports on you. Section 29 of the NTAA requires every bank, insurance company, stock-broking firm or other financial institution to file annual returns naming customers and their locations, together with their transactions, with or without any demand from the tax authority. The threshold is cumulative monthly transactions of NGN50 million for an individual or business name, or NGN250 million for a company. Another thing is that section 29(3) of the NTAa lets a tax authority write directly to your bankers for further financial information where that information would help it settle your assessment. Whatever the privacy debate around that power, the NTAA contains it and the authorities can use it, and have in fact been using it.
The tax authorities now compare notes
Section 48 of the NTAA deserves more attention than it has received. Tax authorities across the federation are now required to exchange relevant information with one another for compliance purposes. Where one authority, in the course of an audit, discovers non-compliance on a tax that belongs to a different authority, it must refer the matter across or invite that authority into a joint audit. Findings made in one audit now get shared beyond the authority that made them. The Joint Revenue Board reinforces this with an integrated Tax ID database covering every taxable person, plus a shared platform for collecting and exchanging revenue data across all three tiers of government.
One thing to note, though. Disclosing to one authority no longer keeps the others away, so the version of events you give the LIRS should match the version the NRS holds.
Every sale, reported
E-invoicing is the other leg of this. The NRS Merchant Buyer Solution requires taxpayers to connect their invoicing tools, sales terminals, accounting software and wider ERP systems directly to the tax authority's platform, which hands the NRS a copy of the data behind every sale made in Nigeria. Underreported revenue and padded expenses become visible without anyone opening a file, because declared income that fails to match the invoice and banking data gets flagged with no human involved. Medium and large taxpayers, meaning those with annual revenue above NGN1 billion and NGN5 billion respectively, are already required to comply. Small taxpayers join from July 2027.
Rev360 Automated Document Request
The NRS transitioned from the previous tax filing platform, TaxProMax to Rev360 which is fully integrated tax filing and administration system. Rev360 is the tax registration portal and every company and business with value added tax (“VAT”) obligations in Nigeria must be registered on Rev360. Now, Rev360 automatically flags when a tax return is not filed and sends an email to the business owner requesting filing. Provided you are registered on Rev360, your non-compliance status is already visible.
The cost of non-compliance went up
Penalties under the new Acts are now steep.
- 1.Failing to register for tax costs NGN50,000 in the first month and another NGN25,000 for every month the failure continues.
- 2.An unfiled or inaccurate return attracts NGN100,000 in month one, then NGN50,000 monthly.
- 3.Award a contract to a supplier with no Tax ID and your company, the one paying the supplier, is exposed to a NGN5 million penalty.
- 4.Incomplete record-keeping costs a company NGN50,000, or NGN10,000 for an individual or business name.
- 5.The heavy one is unpaid tax itself, which attracts a 10% penalty plus interest at the CBN Monetary Policy Rate, currently 27.25%, plus a spread the Minister of Finance will set, bringing the true cost of an unpaid tax bill to roughly an extra 40% a year.
In addition to this, Section 36 of the NTAA allows a tax authority go back six years to assess or re-assess you. Interest continues to accrue on the unpaid amount for the whole of that period.
It Becomes Harder to Operate Without a Tax Clearance Certificate
Your tax filing also determines whether you get a Tax Clearance Certificate (“TCC”). Without a TCC you will find yourself unable to bid for government contracts at any level, register a vehicle, perfect title to land, get building plans approved, or obtain import and export licences. Banks and investors now treat a clean tax record as ordinary due diligence, and some loan and visa processes ask for a TCC too. The NRS also cross-checks a company's filings against the personal tax positions of its directors, which means one director's neglected personal return can hold up a certificate the whole company is waiting for.
The thinking around the new reforms is that businesses that complied fully with tax have carried a heavier cost base than rivals that never filed and the tax reform closes that gap. Staying off the books used to be an advantage, but continuing to do so now exposes your business to greater risk.
What you Should Do.
The list is shorter than people fear.
1. Register and link your Tax ID
Retrieve the Tax ID and register on Rev360. Without it you cannot file returns, and section 8 makes it a condition for contracts with any federal or state ministry, department or agency, and with local governments. Private sector counterparties are copying that requirement into their own onboarding.
2. File even when you owe nothing
A small company, one with turnover of NGN100 million or less and fixed assets not exceeding NGN250 million, pays 0% Companies Income Tax and no Development Levy. One thing to note, though. You keep that exemption by filing for it every year. You fail to file and the NRS can assess you on a best-of-judgement basis, at figures you will not enjoy disputing. A nil return is still a return.
3. Keep digital, audit-ready records
The NTAA expects proper books, kept for at least six years and produced on demand. E-invoicing will reach small businesses by July 2027, so clean digital records that you build now will put you ahead of a requirement that you would eventually need to comply with.
4. Get the monthly taxes right
VAT stays at 7.5%, and your input VAT deserves the same tracking discipline as your output VAT. Withholding tax must be applied at the correct rate and remitted to the tax authorities on time. Manual spreadsheets leak at this point in the chain, month after month.
Compliance as infrastructure
Finally, a word on workload. Reactive compliance means sorting records the week before an audit and chasing a TCC in the week a contract needs it. Running it that way gets messier as the business grows. The alternative keeps your records accurate while the transactions happen, so your tax position is known on any given day of the year and anything the NRS asks for can be produced promptly. Infrastructure of that kind costs less than the chaos it replaces.
TaxStreem was built to finally have tax compliance on autopilot by tax practitioners who did it the manual way. The platform handles e-invoicing, VAT computation, withholding tax, companies income tax, AI-native bookkeeping and audit-ready records and automated tax filing, applying the law as the work happens.
You can have a chat with our team by booking a demo at www.taxstreem.com/get-invite .
