Tax Compliance in Nigeria: TAX REPORTING AND FILING IN NIGERIA, SECTORAL INSIGHTS INTO BANKING, TELECOMS, OIL & GAS, AVIATION, AND SHIPPING

Essential Guide to Tax Compliance in Nigeria: 2025 Sector-by-Sector Mastery | Greenage Attorneys

INTRODUCTION

Tax compliance in Nigeria is regulated by a combination of federal and state laws, under the administration of agencies such as the Federal Inland Revenue Service (FIRS) now known as Nigeria Revenue Service and the respective State Internal Revenue Services (SIRS). The Nigeria Revenue Service formerly Federal Inland Revenue Service is the agency responsible for assessing, collecting and accounting for tax and other revenues accruing to the Federal Government of Nigeria.

Although the general tax framework applies to all entities, sector-specific regulations and reporting requirements differ significantly, notably in high-stake industries such as Banking, Telecommunications, Oil and Gas, Aviation, and Shipping.

This article examines the tax reporting and filing requirements of companies operating within these sectors, with emphasis on the legal framework, filing timelines, common challenges, and recent reforms.

LEGAL FRAMEWORK OF TAXATION IN NIGERIA

The Federal Inland Revenue Service (FIRS) oversees tax administration at the federal level. The core legislations regulating tax administration in Nigeria includes: Nigeria Tax Act (NTA), The Nigeria Tax Administration Act (NTAA), The Nigeria Revenue Service Act (NRSA) and the Joint Revenue Board Act (JRBA) pursuant to the Tax Reforms of the President Bola Ahmed Tinubu administration as was assented by the President of Nigeria on the 26th June 2025.

However, before the tax reforms of 2025, tax administration for Companies are regulated companies Income Tax Act (CITA), Cap C21 LFN 2004 (as amended) Petroleum Profits Tax Act (PPTA), Finance Acts (2019 to 2023) Value Added Tax Act, FIRS Establishment Act, Personal Income Tax Act (for partnerships and individuals)

These laws prescribe the applicable taxes, filing obligations, timelines, and penalties for non-compliance.

1. Banking Sector: Tax Transparency in a Regulated Space ( Tax Compliance in Nigeria )

The banking sector in Nigeria has some of the most stringent regulations. Commercial banks are subject to numerous regulators from different sectors, including the Central Bank of Nigeria (CBN), Securities and Exchange Commission (SEC), Nigeria Deposit Insurance Corporation (NDIC), Federal Inland Revenue Service (FIRS), and States Inland Revenue Services (SIRS). Hence, Banks are meticulous with their tax reporting because in addition to filing audited reports with the FIRS, they must comply with Central Bank of Nigeria (CBN) regulations.

In addition to the Companies Income Tax (CIT) which is at thirty percent (30%), banks also pay Education Tax (2.5% of assessable profits) and the IT levy to National Information Technology Development Fund (NITDA). Banks also collect stamp duties on behalf of the government. It is not uncommon for internal auditors to lament the complexity of reconciling tax deductions with actual remittances, especially when processing a large number of interbank transactions.

Banks are mandated to file audited financial statements annually, alongside detailed tax computations and evidence of tax payments. Compliance is closely monitored by both the FIRS and the Central Bank of Nigeria (CBN), with increasing attention paid to Base Erosion and Profit Shifting (BEPS) concerns, given the digital nature of modern banking.

2. Telecommunications: Facing the Burden of Multiple Taxes ( Tax Compliance in Nigeria )

One of Nigeria’s fastest-growing industries is the telecommunications sector, however service providers such MTN, Airtel, and Glo are severely overtaxed. Since levies in this industry include Federal VAT, NCC operating levies, state environmental fees, signage permits, etc., federal and state taxes constantly overlap. In the past, operators such as MTN and Airtel have had public run-ins with tax officials, resulting in disputes worth billions of naira. This industry is a prime illustration of the pressing need for unified taxation.

In addition to CIT and VAT, operators contend with:

Annual Operating Levy to the Nigerian Communications Commission (NCC) (around 2.5% of net revenue)

Right of Way fees imposed by State Governments, Local government levies, including signage and environmental levies

The industry has repeatedly raised concerns about multiple taxation. In response, the Federal Government has launched the Committee on the Elimination of Multiple Taxation, though implementation remains inconsistent. Tax reporting in telecoms requires careful consolidation of statutory deductions and regional levies.

3. Oil and Gas Sector: Specialized Tax Regimes Under Reform ( Tax Compliance in Nigeria )

The oil and gas sector probably has the most complex tax reporting requirements in Nigeria. Upstream operations are governed by the Petroleum Profits Tax Act (PPTA) and the recently enacted Petroleum Industry Act (PIA) 2021, which introduced:

Hydrocarbon Tax (HT) (for upstream companies in the oil sector)

Companies Income Tax (for all companies)

Royalty payments to the Nigerian Upstream Petroleum Regulatory Commission (NUPRC)

Education Tax and Withholding Tax (WHT) obligations.

It is a common saying that “Filing tax in oil is like writing WAEC every quarter.” Between the Petroleum Profits Tax, royalties, education tax, and now hydrocarbon tax under the Petroleum Industry Act (PIA), operators have to remain vigilant.

Companies are now required to be more transparent, particularly as Nigeria’s extractive industries are being monitored by foreign watchdogs. Although the Petroleum Industry Act (PIA) is currently in its final stages of implementation, it seeks to improve accountability and streamline taxation. For now, however, it has added more layers in practice.

4. Aviation Sector: Navigating Local and International Tax Hurdles ( Tax Compliance in Nigeria )

Another industry grappling with substantial expenditures is aviation, which is impacted by taxes as well as fuel and exchange rates. Nigerian airlines are required to pay 5% VAT on tickets, which is then passed on to passengers. In addition, there are other taxes to aviation authorities, such as the Passenger Service Charges. Aviation companies in Nigeria, both domestic and international, face a blend of tax and sector-specific levies, namely:

5% VAT on airfares

Ticket Sales Charge (TSC) and Passenger Service Charges (PSC) to aviation authorities

Import duties on aircraft and aviation equipment (though often waived)

CIT and Education Tax

According to reports, a domestic airline suspended operations in 2022 in part due exorbitant regulatory fees. International airlines, on the other hand, are sometimes charged less than their domestic counterparts as they rely on tax treaties to limit exposure which is a frustrating disparity.

International airlines also benefit from Double Taxation Treaties (DTTs), which sometimes exempt them from Nigerian taxes if they are taxed in their home countries. However, Nigerian-based airlines still struggle with high operating costs and taxes, leading to frequent calls for tax relief or harmonization.

5. Shipping and Maritime: A Case for Tonnage Tax? ( Tax Compliance in Nigeria )

Nigeria’s maritime sector has potential, but it is still in its development stages. Although the tonnage tax system is a more predictable alternative, most shipping companies choose not to utilize it to obtain its maximum benefit. Regulatory uncertainty is one aspect of the issue. The Nigerian Maritime Administration and Safety Agency (NIMASA) charges 3% of gross freight as levy, but companies additionally pay regular income tax and education tax. Logistics companies struggle to balance import duties and NIMASA levies when trying to scale its operations. This sector needs more tax education, especially for local operators who are unaware of available tax reliefs under the Cabotage Act.

Section 14 of CITA addresses non-resident companies operating in Nigeria, hence, foreign shipping companies remain untaxed as only income derived from Nigeria is taxable.

Key Filing Requirements and Deadlines

All companies and organizations are mandated to:

File annual tax returns with the FIRS within six months of their financial year-end

Submit audited financial statements

File VAT and WHT returns monthly

Pay Pay-As-You-Earn (PAYE) tax monthly for employees

Failure to file or late filing attracts penalties, including fines and interest on unpaid tax.

Conclusion

There is no one-size-fits-all approach to tax filing in Nigeria as every industry has a unique path and its own set of challenges. The tax landscape constantly evolves, whether it’s through telecommunications companies complaining about local taxes, banks navigating IT levies, or oil businesses adapting to new regulations. Businesses require more than mere accountants to be in regulatory compliance; they also require proactive interaction with tax authorities, solid documentation, and tax advisors who are knowledgeable in the industry. Additionally, government organizations are under increasing pressure to harmonize the system and lessen the burden of excessive regulation so that companies can focus on expansion rather than survival.

References

Federal Inland Revenue Service (www.firs.gov.ng)

Petroleum Industry Act, 2021

Companies Income Tax Act (as amended by the Finance Acts 2019–2023)

Central Bank of Nigeria (www.cbn.gov.ng)

Nigerian Communications Commission (www.ncc.gov.ng)

Nigerian Civil Aviation Authority (www.ncaa.gov.ng)

Nigerian Maritime Administration and Safety Agency (www.nimasa.gov.ng)

PwC Nigeria Tax Digest (2023)

BusinessDay Nigeria – Industry Analysis Features

KPMG Nigeria Budget & Tax Review 2023

Tax and Fiscal Policy Reports by Andersen Nigeria

The Author, Sandra Chukwuemeka Esq is a Nigerian lawyer and Associate at Greenage Attorneys who has advised on high-stake tax related matters and compliance issues involving telecoms, oil & gas operators(IOC’s) and multinationals.

READ ALSO : THE ROLE OF LAWYERS IN MANAGING COMPLIANCE ISSUES IN NIGERIAN BUSINESSES VOL. 1

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