Filing Back Taxes & Dealing with Tax Non-Compliance in Nigeria: Step-by-Step Guide

If you’ve ever glanced at your calendar in June and thought, “Did I miss the tax deadline again?” well, you’re probably not alone. Tax, I think, can seem distant until that moment when your business wants a government contract or a letter from the Federal Inland Revenue Service (FIRS) lands on your desk. Whether you forgot, perhaps you misunderstood, or things just got away from you, realizing you need to file back taxes in Nigeria can feel overwhelming. I know, no one loves paperwork, sorting out tax non-compliance doesn’t have to mean panic. This guide is for individuals and business owners who just want to get right with the tax authorities, avoid bigger trouble, or perhaps sleep better at night.

Understanding Tax Obligations in Nigeria

So, let's start at the top. The Nigerian tax system, yeah, it can be complicated, but underneath it’s mostly about: pay what you owe, on time, and to the right place. That “right place” is usually FIRS for federal taxes and your state Inland Revenue Service (like LIRS or OIRS) for local ones. The law expects you to file tax returns even if you had no income, just to show you’re on their radar.

If you’re looking for a primer, see our introduction to Nigerian tax laws for a clear breakdown of the basics.

Types of Taxes Individuals and Businesses Must File

It’s easy to get lost here, so here’s a not-exhaustive list:

• Personal Income Tax (PIT): For individuals (think salary earners, freelancers, and the self-employed), most people file via the state IRS where they reside.
• Companies Income Tax (CIT): All limited liability companies must pay this, typically through FIRS.
• Value Added Tax (VAT): If your business supplies goods or services, you collect and remit VAT. Not so complicated (in theory).
• Withholding Tax (WHT): Deducted at source on specific payments (rent, contracts, commissions), then filed with FIRS or State IRS.
• Education Tax, Stamp Duties, and a few others depends on your business activities.

For further reading, check out our complete guide to business tax in Nigeria.

Key Deadlines and Stipulated Filing Periods

The calendar, frankly, is unforgiving. Here are a few critical deadlines:

• Personal Income Tax: Usually due by March 31st (for the previous year) for individuals.
• Companies Income Tax: Due six months after the end of your company’s accounting year, and yes, FIRS checks.
• VAT: Due 21st day of the month following transactions.
• WHT: Same as VAT, by the 21st of the next month.

Miss these? Things pile up and the penalties aren’t trivial. For a helpful overview, see our 2025 Nigeria Tax Deadlines & Tax Calendar.

What is Tax Non-Compliance and Who Is Affected?

“Non-compliance” sounds serious, and it is. At its core, it means not following tax rules, whether by accident (it happens, trust me), on purpose, or just by not keeping up.

Common Reasons for Non-Compliance in Nigeria

If you wonder, “How do people mess this up?” Well, lots of ways:

• Maybe you didn’t know you had to file tax returns, even if your business didn’t make money that year.
• Documents got lost or, I don’t know, the accountant quit.
• You guessed wrongly about how much VAT to remit, or maths wasn’t your strong suit.
• Perhaps, you just thought, “It’s not that important; everyone does it.” Well, not everyone, but you get the drift.

How Non-Compliance is Detected (Tax Audits & Compliance Checks)

You might think you’re flying under the radar. But tax authorities are getting warmer every year, sometimes with tech, sometimes with random audits, and sometimes, I think, by spotting odd bank transactions.
- Tax Audits: FIRS or the State IRS can review your records, comparing what you reported with, well, what they know or suspect.
- Compliance Checks: Sometimes a quick letter, or phone call, just asking for clarification.
- Data Matching: Payments from clients, your VAT, or even information from your banks can raise questions.

Consequences of Not Filing or Paying Taxes in Nigeria

Here’s where reality bites. Procrastination, here, has a price and sometimes more than one.

Financial Penalties and Fines

The first thing you’ll notice (if they notice you) is the penalty for late tax filing in Nigeria. For example, for CIT there’s a N25,000 fine for the first month, then N5,000 for every additional month late. VAT and WHT penalties start at N50,000 for corporations plus daily fines if you ignore further.

Additional Interest on Outstanding Liabilities

On top of fines, interest accumulates on whatever you owe (often 10% per year, sometimes a little more, it changes). So, even small delays snowball.

Legal Action, Criminal Prosecution, and Asset Seizure

People joke, “Are they really going to arrest me for taxes?” Well, in certain cases, yes. If you refuse to cooperate, FIRS or State IRS can, and do take things further.
- Court orders, asset seizures, maybe even temporary closure of your business premises.
- For serious, long-running tax evasion, criminal prosecution is real, not just a threat.

Impact on Business Operations (Tax Clearance Certificate, Frozen Accounts, Reputation)

Most surprising to small business owners:
- Can’t get government contracts or some business licenses without a Tax Clearance Certificate (TCC).
- Account freezes, denial of import/export rights sometimes.
- And word does get around, banks, partners, even big clients may check.

How to File Back Taxes in Nigeria: Practical Steps

So you missed a year. Or more than one. Maybe things got confusing, or maybe you just hoped it would sort itself out and, honestly, I can relate. The important bit? Start now. Don’t say, “Next month.” Below is how to file back taxes Nigeria, realistically.

For a thorough breakdown, see How to File Taxes in Nigeria: Step-by-Step Guide.

Assessing Your Tax Filing Status and Records

First, check your records. Do you know which years or periods are missing or late? If not, contact FIRS or your State IRS. Lots of people just aren’t sure (life’s messy like that). Review:
- Previous filings and payment receipts
- Employer pay slips or business income statements

If you can’t find everything, don’t panic. Note what you have and what’s missing.

Calculating Outstanding Tax Liabilities

FIRS has calculators, or, honestly, a spreadsheet and patience works too. You’ll need to estimate:
- What income or turnover you had for the missing years
- How much tax should have been paid, plus interest and penalties

It may not be perfect, tax officials usually ask questions if the numbers seem wildly off, but starting is better than nothing.

If you need help crunching the numbers, the MyTax Calculator can assist with tax computations for past years.

Using FIRS Self-Service Portals and Manual Filing Options

These days, you can do much on the FIRS self-service portal, including:
- Register or update your taxpayer details
- Download forms
- File returns and make payments (sometimes instantly)
- Request a payment plan

Not everyone loves tech, though, so:
- Walk-ins at FIRS tax offices still work (sometimes slower, but you’ll meet a human being).
- Many states have their own IRS websites, search “[Your State] IRS” or try their offices directly.

Navigating the Back Tax Payment Process (Payments, Penalty Waivers, Interest)

After filing, you’ll see:
- Total taxes due
- All penalties and interest to date

Some years, FIRS announces waivers (more below). If you can’t pay all at once, discuss a payment plan, there’s usually flexibility, especially if you come forward on your own before an audit.

Available Remedies & Relief Options

Maybe you’re sweating a little now, thinking, “Will I ever get out from under these penalties?” Sometimes, yes.

Tax Amnesty Programs and Penalty Waivers

FIRS occasionally offers “tax amnesty,” letting you pay overdue taxes with part or all penalties and interests forgiven if you disclose and pay voluntarily, like the 2020 Covid-19 relief window. These programs don’t run forever, so if you hear one’s open, act fast. Check the FIRS homepage or follow their social pages.

Voluntary Disclosure and Regularization Schemes

Besides amnesty, FIRS and state tax authorities run regularization schemes. That’s a formal way of saying, “Tell us everything, pay what you owe, and we’ll go easy on you.”
- Voluntary disclosure looks better than being found out
- Sometimes you get official waivers or lighter interest

What to Do if You Face a Tax Audit

If you get audit notification:
- Stay calm
- Quickly gather every document (returns, bank statements, invoices)
- If your calculations are off, show how you got there, honesty, I think, goes a long way (even if it’s embarrassing)
- Consider getting a tax adviser, sometimes, it’s just less stressful and you avoid missteps

If you need to find a tax professional, visit our tax expert directory.

Preventing Future Non-Compliance: Best Practices

Let’s be honest, doing it all right next time is easier said than done. But here’s what actually helps.

Building a Tax Compliance Culture

• Put tax deadlines on your calendar, not just in your head
• Set reminders, even if your business is small or “just starting”
• Teach staff (if you have any) the basics
• Don’t let paperwork pile up for months

Leveraging Professional Tax Advisory Services in Nigeria

Accountants, tax agents, or even an experienced consultant, cost money, yeah, but so do fines. A good adviser spots mistakes, and tells you about incentives you might otherwise miss.

Frequently Asked Questions

Can I go to jail for not filing taxes in Nigeria?

Short answer: yes, in the worst scenarios. Usually, FIRS goes for fines and asset seizures first, but persistent or deliberate avoidance carries criminal penalties.

How long does FIRS keep records for back taxes?

Typically, FIRS can audit up to 6 years back for most returns. If they suspect fraud, there isn’t a strict limit.

What documents do I need to file back taxes?

• Personal or company tax identification number (TIN)
• Previous returns (if any)
• Bank statements
• Payroll or business income records
• Relevant transaction invoices, receipts

Don’t worry if you can’t find every last receipt, showing effort goes a long way, and sometimes tax authorities accept reasonable estimates.

Conclusion & Resources

So, filing back taxes in Nigeria isn’t fun, but it’s very doable if you stay realistic, I think. The system isn’t perfect, and yes, FIRS can sometimes feel distant or slow. Still, regularizing your tax status gives peace of mind and unlocks opportunities, like that TCC or new business contract you can’t get otherwise. Don’t wait for the letter. Start today, or at least, you know, this week.

If it all still seems too much, don’t be shy, ask a professional. A little advice now can prevent a lot of headaches later.
Sources used:
- FIRS Filing and Payment Details
- Lagos State IRS Payment and Amnesty Notices
- TaxProMax Self-Service

If you need specific walkthroughs or forms, those links are a great place to start.