Federal Government Issues Stern Warning on Tax Compliance as Deadlines Loom
The Federal Government has issued an urgent warning to Nigerian taxpayers, emphasizing that merely paying taxes does not fulfill legal obligations under the country's tax laws. With critical filing deadlines rapidly approaching, authorities are raising alarm about dangerously low compliance rates across the nation.
Tax Filing Crisis: Less Than 5% Compliance in Many States
Taiwo Oyedele, Chairman of the Presidential Committee on Fiscal Policy and Tax Reforms, has described Nigeria's tax compliance situation as "deeply alarming." During a recent webinar for HR managers, payroll officers, chief finance officers, and tax professionals, Oyedele revealed that in numerous states across the federation, fewer than five per cent of eligible taxpayers actually file their annual tax returns.
"Paying tax is not the same as filing tax returns," Oyedele warned emphatically. "Even when taxes have been deducted at source through systems like Pay-As-You-Earn, the law still requires both employers and employees to file annual returns. That fundamental obligation has not changed under any tax regime."
Critical Deadlines Nigerians Must Observe
The Federal Government has highlighted specific statutory deadlines that taxpayers must adhere to:
- Employers must submit annual tax returns for their employees by January 31
- Individual taxpayers must file their self-assessment returns by March 31
Oyedele cautioned that failure to meet these deadlines could result in serious consequences including:
- Financial penalties
- Tax audits
- Reputational damage
- Increased scrutiny from tax authorities
Widespread Misconceptions About Tax Obligations
According to Oyedele, one of the primary factors contributing to Nigeria's low compliance rate is the widespread misconception that Pay-As-You-Earn deductions automatically settle all tax responsibilities. This misunderstanding has created a significant gap between tax payments and proper filing procedures.
"The filing of tax returns remains compulsory under both existing and reformed tax laws," Oyedele stressed. "This is a core disclosure requirement that enables tax authorities to accurately assess compliance levels across the economy."
Universal Application of Filing Requirements
The Federal Government has clarified that the obligation to file tax returns applies universally, regardless of income level or tax status. This includes:
- Low-income earners
- Businesses enjoying tax incentives
- Organizations operating under special concessions
- All employers and employees
"Even when you benefit from exemptions or incentives, you must still declare them through proper filing," Oyedele explained. "Transparency and disclosure are becoming central pillars of our tax reform agenda."
Government Initiatives to Simplify Tax Processes
Recognizing that poor awareness and perceived complexity contribute to weak compliance, the Federal Government is taking concrete steps to streamline tax filing procedures. Tax authorities, in collaboration with the Joint Revenue Board and state internal revenue services, are working to simplify processes and improve accessibility for all taxpayers.
"In many states, more than 90 per cent of eligible taxpayers have not filed returns," Oyedele revealed, highlighting the immense scale of the compliance challenge facing the nation.
Building a Culture of Tax Responsibility
With only days remaining before key deadlines expire, the Federal Government is urging employers, entrepreneurs, and professionals to take immediate action. Oyedele emphasized that proper filing not only fulfills legal obligations but also helps taxpayers reconcile projected earnings with actual income, potentially reducing disputes and future liabilities.
"The ultimate goal is not punishment," Oyedele concluded. "It is about building a sustainable culture of responsibility, transparency, and trust between citizens and government. This webinar forms part of our broader efforts to deepen tax education, boost voluntary compliance, and strengthen revenue mobilization across Nigeria's formal and informal sectors."
The Federal Government's warning comes as President Bola Tinubu's administration intensifies efforts to improve tax compliance and revenue generation. Under the ongoing tax reform agenda, transparency and proper disclosure are taking center stage, making it increasingly risky for individuals and businesses to remain outside the formal tax system.
