The Nigeria Revenue Service (NRS) has urged individuals and businesses to comply voluntarily with the new tax laws, emphasising the need for public awareness, accurate information and a clear understanding of the reforms.
The service said providing clear guidance on tax obligations, available reliefs and applicable procedures would ease taxpayers’ concerns, prevent avoidable disputes and build public confidence in the tax system.
Alhaji Ismail Abdullahi, the NRS state administrator for Jigawa, Kano and Katsina states, made the call during an engagement with taxpayers and other stakeholders to discuss the implications of the new tax laws for businesses, households, states and local governments.
The discussions addressed concerns about whether banks could automatically deduct taxes from personal accounts, whether loans and money received from relatives would be considered taxable income, and how the reforms could affect small businesses.
Abdullahi acknowledged the concerns, urging taxpayers to rely on accurate information about the laws and the procedures governing tax enforcement.
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He said the new tax regime did not, in itself, authorise the automatic deduction of taxes from personal bank accounts, adding that tax collection and recovery must comply with applicable laws and procedures.
He also clarified that the standard Value Added Tax (VAT) rate remained 7.5 per cent.
On business transactions, the NRS explained that money received as a loan should not automatically be classified as sales revenue or profit. It stressed that proper documentation was necessary to establish the nature of financial transactions.
“For instance, if a trader receives N500,000 as a loan, the amount should not automatically be treated as sales or profit. Proper documentation is necessary to establish the nature of the transaction,” he said.
The service urged taxpayers to maintain accurate financial records to support proper tax assessments and reduce avoidable disputes with tax authorities.
It also advised individuals and businesses to familiarise themselves with the tax provisions relevant to their activities, identify eligible reliefs, keep appropriate records and seek clarification from the relevant authorities when necessary.
Abdullahi further stressed the importance of understanding taxpayers’ rights, including the procedures for challenging tax assessments or decisions.
The engagement focused on three areas: the provisions of the new tax laws affecting companies, individuals and businesses; practical steps for achieving voluntary compliance; and measures to close the tax compliance gap through improved taxpayer services.
On compliance, Abdullahi highlighted the need for proper registration, accurate record-keeping, transaction reconciliation, timely filing of returns, payment of taxes and prompt responses to official correspondence.
The third area examined the difficulties taxpayers face in meeting their obligations and explored ways to improve service delivery and make compliance easier.
Participants were encouraged to share their experiences and identify challenges associated with meeting tax obligations, including conflicting interpretations of the laws and difficulties with digital tax processes.
The NRS official said feedback from taxpayers would help the service identify gaps, improve its procedures and provide more accessible support to individuals and businesses.
The service reiterated that effective tax administration required shared responsibility, with the NRS providing clear guidance, consistent treatment and accessible assistance, while taxpayers supplied accurate information, maintained proper records and met their obligations within stipulated deadlines.
Abdullahi expressed optimism that improved public understanding, transparent procedures and responsive taxpayer services would strengthen public trust, encourage voluntary compliance and improve the effectiveness of Nigeria’s tax administration system.
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