Tax Returns: What Nigerians Get Wrong and How to Do It Better in 2026

Every year, many Nigerians file tax returns late, file the wrong thing, or don’t file at all, then act surprised when they can’t get a tax clearance certificate, access certain corporate opportunities, or resolve issues with their employer’s PAYE.

The truth is that most tax-return problems are not because people are trying to evade taxes. They happen because Nigerians misunderstand what “filing” actually means, mix personal and business finances, or assume the government will “figure it out”.

In 2026, those habits will cost more because compliance systems are getting stricter and tax authorities are relying more on data matching and documentation.

A lot of Nigerians believe tax returns are for “big men”, multinationals, and CEOs. Meanwhile, many salary earners assume their employer has handled everything, and freelancers assume that because their income is irregular, there is nothing to declare.

In reality, filing is simply how the tax system records what you earned and what you owe, even if your tax due ends up being small. If you want to avoid future issues, especially with tax clearance, government portals, contracts, visas, loans, or business registrations, filing consistently matters.

Mixing up PAYE with personal tax returns

For employees, PAYE is the tax your employer deducts and remits. But your personal compliance does not end at “my HR said it’s sorted.” Many people never ask for their annual PAYE summary, never confirm the remittance, and never keep their records.

The result is that when they need proof of tax compliance, they scramble. In 2026, do not wait until you need a document to start looking for tax evidence. Keep your payslips, request an annual tax deduction summary from HR, and confirm your taxpayer details are correct.

Late filing is one of the most expensive tax mistakes because penalties and interest add up quickly. Many people also postpone filing because they’re afraid they did something wrong, so they do nothing. The smarter move in 2026 is to prepare early.

Create a simple routine: gather income records monthly, store receipts and invoices as you go, and do a quarterly check-in with an accountant if your income is mixed.

Reporting revenue but not tracking allowable costs properly

This is the classic small business and freelancer mistake in Nigeria: money enters your account, and you assume everything is profit. Then you either overpay tax, or you under-report because you can’t properly explain your expenses.

A tax return is not just “how much you made”. It’s also the legitimate costs of making that money. In 2026, if you want to file better, you must keep clear evidence of business expenses, separate personal spending from business spending, and ensure every claim you make can be supported with an invoice, receipt, or bank transfer trail.

Not claiming reliefs because they don’t know they exist

Many taxpayers overpay simply because they do not know that certain reliefs and deductions exist or they assume claiming them is “stressful”. Salary earners forget that statutory deductions and qualifying reliefs can reduce taxable income.

Tenants often fail to keep rent proof that could support rent-based relief where applicable. Business owners fail to organise withholding tax documentation that could reduce their final liability. Paying less in 2026 is often about being organised enough to claim what is already allowed.

Withholding tax: the silent reason many SMEs pay twice

Withholding tax deductions are common in Nigeria, especially when you do jobs for corporates, agencies, and established businesses. The mistake is doing the job, collecting “net payment”, and forgetting about the withholding portion completely.

That withheld amount can matter during annual filing, but only if you collect and reconcile the credit notes properly. In 2026, treat withholding tax like your money already paid forward. Track it per client, per invoice, and reconcile it before you file.

A painful truth: a lot of “tax returns” in Nigeria are prepared with estimates and memory, not records. Guesswork increases errors, raises audit risk, and usually leads to either overpayment or compliance problems later.

In 2026, replace guesswork with a simple system: one folder for income proof, one folder for expenses, one folder for tax documents. Use a basic spreadsheet or bookkeeping app, and reconcile monthly.

Registering wrongly or using inconsistent details

It sounds small, but inconsistent names, phone numbers, emails, or addresses across agencies can create real tax problems. Some people have multiple taxpayer profiles across different platforms, or they use a personal account for business filings without proper structure.

In 2026, use one consistent identity across your tax interactions. If you operate as a business, formalise it properly and align your tax profile to your business structure.