Yes. A Nigerian company can file every return on time, pay every assessment in full and still overpay tax. Filing on time proves you were punctual. It does not prove the figure was right, and under the new tax laws, treatment that was correct in 2025 can now be wrong.
That gap is the subject of today's myth vs fact. Tax advisers quoted by BusinessDay on 7 October 2026 describe firms that comply on paper and still lose money because they never re-tested old assumptions against the new rules.
What is the myth about filing on time and overpaying tax in Nigeria?
The myth: "We file on time and pay what we are assessed, so our tax position is fine."
The fact: Nobody at the Nigeria Revenue Service (NRS) checks whether you paid too much. Penalties exist for paying late or too little. Overpayment is your problem to find, and it only shows up when you review your own treatment.
Obi Onyinye, a Lagos financial adviser, told BusinessDay that tax problems often do not come from non-compliance at all. Firms file correctly under past treatment and never check whether it still fits.
Which old tax practices now cost Nigerian businesses money?
Four habits come up repeatedly.
- Wrong company size. The small company exemption now covers firms with gross turnover of up to ₦100 million and fixed assets of up to ₦250 million. The old turnover limit was ₦25 million. A business that grew into the exemption but still computes 30% company income tax is paying tax it does not owe. Our guide on the small company exemption explains what it covers and what filing duties remain.
- Input VAT left unclaimed. The new regime widens recovery of input VAT, including VAT on services and on fixed assets used for taxable supplies. Finance teams still treating service VAT as a cost are leaving credits behind. See our post on claiming input VAT on services.
- Misjudged taxable income. Victor Atanda of Dutch Royal Integrated Resources called misunderstanding taxable income the biggest misconception in Nigerian tax discussions, even among professionals. It cuts both ways: income wrongly included raises your bill, and income wrongly excluded raises your risk.
- Rate-only updates. Changing the percentage in last year's computation is not a transition. Deductions, related-party transactions and supporting documents need a fresh look.
Which accounting periods fall under the new rules?
According to the Federal Ministry of Finance transition guidelines issued in June 2026, returns for accounting periods starting on or after 1 January 2026 fall under the new laws. Earlier periods stay under the previous regime. A company with a calendar year-end is therefore filing its first full year under the new rules for 2026, and the classification test applies to that year.
What does overpayment look like in naira?
Here is a simple illustration (not a real client). A trading company has gross turnover of ₦80 million, fixed assets of ₦120 million and a taxable profit of ₦12 million. Under the old ₦25 million turnover limit, it paid company income tax. Under the new thresholds it qualifies as a small company.
If it keeps computing at the 30% rate, it pays ₦3.6 million in company income tax on that profit. The correct figure is nil. Every return was on time and every payment was made. The loss is still ₦3.6 million.
Why is the risk higher in 2026?
The NRS has set a 2026 revenue target of ₦40.71 trillion, against ₦28.3 trillion collected in 2025, according to reports by NAN and the Guardian. That is about 44% higher. The Service says it will lean on stronger audits and on data from e-invoicing and government contracts.
Two things follow. If your accounts and your e-invoice data disagree, you will be asked to explain. And if your position is wrong in the NRS's favour, no one will tell you.
What this means for your business
Treat the rest of 2026 as a review window. Four steps, in this order:
- Re-test your company size against turnover and fixed assets for the current year, and again at year end.
- Re-run input VAT claims for services and fixed assets since 1 January 2026. Refund claims carry a time limit, covered in our VAT refund guide.
- Reconcile ledgers to e-invoices every month, not at year end.
- Document each judgement on classification and taxable income, so a future query has a paper answer.
FAQ
Can I recover tax I overpaid in Nigeria?
Often yes, through an amended return, a credit or a refund claim, but each route has its own conditions and time limits. The sooner you spot the error, the better your chances. Speak to an adviser before you file an amendment.
Does a small company still have to file returns?
Yes. The exemption removes the tax charge, not the filing duty. Late or missing returns attract penalties even when the tax due is nil.
Do the new rules apply to my 2025 accounts?
No. Per the Ministry of Finance guidelines, accounting periods that started before 1 January 2026 stay under the previous regime. Periods starting on or after that date use the new laws.
Is your 2026 tax position still based on last year's assumptions? Contact VOG Global for a tax health check before your next filing deadline: info@vog.global, 0807 232 3237 or 0809 214 7147.