E-SERVICE · SELF-EMPLOYED
Direct assessment
If nobody deducts tax from your income at source, you assess yourself. File a return of income by 31 March, declare what you earned, claim your reliefs, and receive an assessment you can pay in one sum or in instalments.
Who is assessed directly
Direct assessment is the route for every taxable person whose income does not pass through an employer’s payroll: traders and shop owners, transporters, contractors, landlords, farmers operating commercially, professionals in private practice — doctors, lawyers, accountants, engineers, architects, consultants — partners in a partnership, and anyone with substantial income from rent, investments or a second business alongside employment.
The obligation comes from section 41 of the Personal Income Tax Act: every taxable person must file a true and correct return of income for the preceding year within ninety days of the start of the year of assessment — in practice, by 31 March. The return declares income from all sources, claims the Consolidated Relief Allowance and any other reliefs due, and computes the tax. The Service then raises an assessment, which either confirms your computation or explains where it differs.
Where a person liable to be assessed does not file, section 65 permits the Service to raise a best-of-judgement assessment: an assessment on the Service’s own estimate of income, using enumeration data, bank information, premises size, employee numbers and comparable businesses. That assessment stands unless the taxpayer displaces it with evidence, which is a far harder position than simply filing.
Filing your annual return
Gather your income records
Sales or fee records, bank statements, rent received, and for a business, the accounts for the year. Businesses with turnover above ₦25 million should file audited accounts.
Open the return on the portal
Select the year of assessment. Prior-year figures are pre-filled for comparison, and any withholding tax credits already recorded against your TIN appear automatically.
Declare income from every source
Trade or profession, employment, rent, interest, dividends, pension and any other source. Income already suffering a final withholding tax is declared but not taxed twice.
Claim your reliefs
The Consolidated Relief Allowance is computed automatically. Add pension, NHF, NHIA, life assurance premium and interest on an owner-occupier housing loan.
Submit and review the assessment
The Service raises the assessment within twenty-one days. It shows the computation line by line, so any disagreement can be pinpointed rather than argued in general terms.
Pay, or object
Pay in full or apply for instalments. If you disagree, file a notice of objection within thirty days stating the grounds and your own figure.
How the tax is computed
A worked example for a self-employed taxpayer with a gross annual income of ₦4,800,000.
| Step | Basis | Amount |
|---|---|---|
| Gross annual income | Declared on the return | ₦4,800,000 |
| Consolidated Relief Allowance | Higher of ₦200,000 or 1% of gross, plus 20% of gross | ₦1,160,000 |
| Pension contribution | 8% of gross | ₦384,000 |
| National Housing Fund | 2.5% of gross | ₦120,000 |
| Taxable income | Gross less reliefs and deductions | ₦3,136,000 |
| Tax on first ₦300,000 @ 7% | Band 1 | ₦21,000 |
| Tax on next ₦300,000 @ 11% | Band 2 | ₦33,000 |
| Tax on next ₦500,000 @ 15% | Band 3 | ₦75,000 |
| Tax on next ₦500,000 @ 19% | Band 4 | ₦95,000 |
| Tax on remaining ₦1,536,000 @ 21% | Band 5 | ₦322,560 |
| Annual tax payable | Sum of bands | ₦546,560 |
| Effective rate | Tax as a share of gross income | 11.39% |
What to have ready
- Taxpayer Identification Number.
- Statement of income for the year, or accounts if you keep them.
- Bank statements for all business accounts for the year.
- Evidence of withholding tax suffered — credit notes or receipts.
- Rent receipts, where you receive rental income.
- Pension and National Housing Fund remittance evidence.
- Life assurance premium receipts.
- Evidence of interest paid on a loan for an owner-occupied house.
- The previous year’s assessment and receipt.
Deadlines and penalties
The return is due by 31 March. Late filing attracts ₦5,000 plus ₦100 for each day the failure continues, under section 94 of the Personal Income Tax Act.
Late payment of an assessment attracts ten per cent of the tax due plus interest at the Central Bank monetary policy rate plus five per cent, under section 76.
Failure to file at all invites a best-of-judgement assessment under section 65, which you then carry the burden of displacing with evidence.
Instalment arrangements are available on application before the due date and are normally granted over three to six months against a direct debit mandate.
Estimate before you file
The calculator applies the same reliefs and bands the assessment desk uses, and shows the full breakdown.