Top 7 NRS Compliance Mistakes to Avoid This Tax Season

As the tax season approaches, staying compliant with the Nigeria Revenue Service (NRS) is crucial for businesses and individuals alike. Failing to meet requirements can lead to penalties, interest charges, and even legal complications.

Here are the top 7 NRS compliance mistakes to avoid this tax season:

1. Late Filing of Returns

One of the most common mistakes is missing deadlines for submitting tax returns. Whether for companies or individuals, late filing can result in fines and increased scrutiny. Always mark deadlines on your calendar and submit early to avoid last-minute stress.

2. Inaccurate or Incomplete Information

Providing incorrect or incomplete financial data can trigger audits or penalties. Double-check your records, ensure all figures reconcile, and confirm that your submissions reflect accurate revenue, expenses, and deductions.

3. Ignoring Withholding Tax (WHT) Obligations

Many businesses fail to remit withholding taxes from payments to suppliers or contractors. Ensure that WHT is properly deducted, remitted, and reported to the NRS to avoid future liabilities.

4. Overlooking Value-Added Tax (VAT) Compliance

VAT is often miscalculated or underreported. Ensure your VAT returns match your invoicing records, apply correct rates, and maintain supporting documentation for all transactions.

5. Not Reconciling Accounts

Failing to reconcile bank accounts, sales, and expenses can lead to discrepancies in your returns. Regular reconciliation ensures accuracy and helps identify potential errors before filing.

6. Neglecting Tax Updates and Reforms

Tax laws and rates frequently change. Staying unaware of new NRS regulations can result in non-compliance. Keep yourself updated with circulars, notices, and official publications from the NRS.

7. Poor Record-Keeping

Good record-keeping is essential. Businesses and individuals often discard invoices, receipts, or financial statements, making it difficult to substantiate claims during audits. Maintain organized digital or physical records for at least the legally required period.

Tax compliance does not have to be stressful. Avoid these mistakes by staying organized, keeping accurate records, and staying up-to-date with NRS guidelines.

Consider consulting a professional if your business has multiple income streams or complex transactions, proactive management is always cheaper than reactive penalties.