A Tax Compliance Checklist for Growing Businesses

As a business grows, so do its tax obligations. Missed filings and poor records can lead to penalties that are easy to avoid. This checklist covers the essentials every growing business in Nigeria should have in place.

Why Compliance Gets Harder as You Grow

A small business with a handful of staff and customers can often manage its taxes with a few spreadsheets and a good memory. Growth changes that. More staff means more payroll tax; more suppliers means more withholding tax; more sales means more VAT to account for; and the business becomes more visible to the tax authorities.

Most penalties are not the result of deliberate wrongdoing. They come from obligations that nobody owned, deadlines that were missed in a busy month, or records that could not support the figures filed. A simple checklist, reviewed regularly, prevents most of them.

A Note on Nigeria’s 2025 Tax Reforms

Nigeria’s tax laws were overhauled in 2025. The Nigeria Tax Act and the Nigeria Tax Administration Act, in force from January 2026, brought many older tax laws together, changed how some taxes are calculated and administered, and changed some thresholds and exemptions.

If your tax processes were set up before 2026, they should be reviewed against the new rules. Rates, thresholds and deadlines are set by law and can change, so this checklist does not quote them: confirm the current ones with your tax adviser or the Nigeria Revenue Service before you rely on them.

1. Registration and Identification

• Tax identification: make sure the business is registered for tax and that its tax identification number is on its invoices, contracts and correspondence where required.
• The right taxes: check that the business is registered for every tax that applies to it, including VAT where it applies and payroll tax with the right state.
• Up-to-date details: when the business moves, changes its name, opens a branch or changes its directors, update its records with the tax authorities.

2. Records You Should Keep

Good records are your best defence in a tax audit. Keep, for every year:

• sales invoices and receipts, and the VAT charged on them;
• purchase invoices, especially those you claim VAT or expenses on;
• payroll records: salaries, allowances, deductions and remittances;
• withholding tax deducted from suppliers, and the receipts or credit notes for it;
• bank statements and reconciliations;
• contracts, fixed asset registers and your annual financial statements.

Keep them organised and easy to retrieve, and keep them for as long as the law requires. A tax audit can look back several years.

3. Monthly Obligations

Most growing businesses have obligations every month. Assign each one to a named person, with a deadline in the calendar.

• VAT: charge VAT correctly on taxable sales, keep a record of VAT paid on purchases, and file and pay your returns on time.
• PAYE: deduct income tax from employees’ pay and remit it to the tax authority of the state where they live (in Lagos, the Lagos State Internal Revenue Service) by the deadline.
• Withholding tax: deduct tax from qualifying payments to suppliers, remit it on time and give the supplier evidence of the deduction.
• Reconciliations: check each month that what you filed matches your accounts, so differences are caught while they are small.

4. Annual Obligations

• Company income tax: file your annual return, with your audited financial statements, by the deadline after your year end, and pay any tax due.
• Employer’s annual return: file the annual return of the salaries paid and tax deducted for your employees with the state tax authority.
• Tax clearance: keep your tax clearance certificate current. Many contracts, tenders and banking processes ask for it.
• Year-end review: before you close the year, review your tax position with your adviser so that there are no surprises when the return is due.

5. Habits That Prevent Penalties

• One owner per obligation: every tax has a named person responsible for it, and a back-up.
• A tax calendar: every deadline for the year, in one shared calendar, with reminders a week before.
• Separate funds: VAT, PAYE and withholding tax you collect belong to the tax authority. Keep them aside, so they are there when payment is due.
• Evidence for every filing: keep the return, the payment receipt and the working papers together.
• Respond promptly: if the tax authority writes to you, reply within the time given, and take advice before you do.

What to Do If You Have Fallen Behind

If you discover missed filings or underpaid tax, do not wait for the tax authority to find them. Work out what was missed, gather the records, and take advice on how to put it right. Dealing with the problem early is almost always cheaper and less stressful than dealing with it after an audit begins.

When to Get Help

Many businesses manage their routine filings in-house and bring in an adviser for planning, reviews and anything unusual. It is worth getting help when you take on staff for the first time, open a new branch or state, start selling a new kind of product or service, receive a letter from the tax authority, or simply are not sure you are getting it right.

At JoDyn, we help organisations stay compliant, plan ahead and deal with the tax authorities with confidence. Talk to us about a tax health check.