Paying Nigerian company income tax: lump sum or instalments
When a Nigerian company must pay its income tax, what the Act says about paying in instalments, and what paying late adds to the bill.
By Achekam · · 5 min read · For Running a business businesses in Nigeria
For many Nigerian companies, the tax bill is worked out in a rush near the filing deadline, and only then does someone ask where the money will come from. If the answer is "not all of it, not yet", the next question is whether the company can pay in parts, and what it costs if the money arrives late.
This article answers those questions from the Nigeria Tax Administration Act, 2025 and the NRS's own guidance. It covers the payment deadline, the option to pay in instalments, how payments are made, the Development Levy that sits beside company income tax, what lateness adds, and how to record each payment so that it can be proved later.
The deadline is the filing date
Under the Nigeria Tax Administration Act, 2025, every company, whether or not it is liable to pay tax, must file a self-assessment return with the Nigeria Revenue Service not more than six months after the end of its accounting year, if it has been in business for more than 18 months. A newly incorporated company files within 18 months from incorporation or not later than six months after the end of its first accounting period, whichever is earlier.
Section 49(1) of the Act ties payment to that date: tax is payable on or before the due date of filing, in one lump sum or in instalments.
The return itself makes the link plain. Among what it contains, alongside the self-assessment form, the financial statements and the tax and capital allowances computations, is evidence of payment of the tax due, with an attestation signed by a principal officer. A company cannot sensibly treat filing and paying as two separate projects months apart.
Lump sum or instalments
The Act allows the tax to be paid in one sum or in instalments, on or before the due date of filing. Read as it is worded, the instalments, like the lump sum, fall on or before that date. Do not treat them as permission to pay after it; if your company needs more time than that, take advice before the deadline, not after.
That makes instalments a planning tool. A company that knows its likely tax early in the year can set aside and pay part of it month by month, instead of finding the whole amount in the final weeks. If you intend to pay in instalments, agree with your adviser how each instalment should be made and referenced on the portal so it is credited to the right year and tax, and keep a schedule of what has been paid against the expected total.
Paying through the portal
The NRS says tax returns must be filed electronically through its self-service portal, where the taxpayer downloads the return forms, uploads the completed forms and pays through the portal's approved electronic payment channels. The portal also shows the status of returns and lets taxpayers use their withholding tax credits.
The NRS's company income tax page sets out who must file, how to file and pay on the portal, and the deadlines. Withholding tax credits deserve a look before you pay: credits from tax your customers deducted can reduce the cash you need to find.
The Development Levy beside it
The NRS says a Development Levy of 4% is imposed on the assessable profits of all companies chargeable to tax under Chapters Two and Three of the Nigeria Tax Act, excluding small companies and non-resident companies.
For a company that is neither small nor non-resident, the levy is a second charge on the same profits, so build it into the same cash plan. Confirm with your adviser how it is computed, returned and paid for your company, at the time of writing.
What paying late adds
The NRS says interest and additional charges apply to taxes unpaid after the deadline. The Act spells this out:
- Late payment. Under section 65(1), tax not paid within the prescribed period attracts an addition of ten percent of the tax payable, plus interest at the Central Bank of Nigeria monetary policy rate plus a spread set by the Minister for naira, or SOFR plus a spread for foreign currency.
- Late filing. Under section 101, a taxable person who fails to file returns, or knowingly files incomplete or inaccurate ones, is liable to an administrative penalty of N100,000.00 in the first month of the failure and N50,000.00 for each subsequent month it continues.
- Under-declared tax. Under section 34, tax under-declared in a self-assessment is payable from the due date of the return with penalty and interest.
Interest keeps running while tax is unpaid, so a partial payment on time still reduces the cost of a shortfall. The fuller picture is in what a late Nigerian tax return costs.
Recording each payment
In Achekam, a Nigerian tax return is prepared by one person, reviewed by a second and approved by a third, after which its rule snapshot and figures are frozen. An amendment becomes a new version, and nothing is overwritten.
Each payment, whether the full amount or one instalment, is recorded with the authority's own reference and receipt, an RRR or DIN. Achekam never generates a payment reference, and a second person must confirm each payment. RRR and DIN formats are not validated, so the confirmer should compare the reference on the receipt with the one typed in, character by character.
For instalments, that gives you a trail of separate payments, each with its own reference and confirmation, adding up to the tax on the frozen return.
Planning cash for the year's tax
- Estimate the year's company income tax and Development Levy from the management accounts as the year goes on.
- Decide early whether to pay in one sum or in instalments before the filing date.
- Set aside cash monthly in a separate account if instalments are not being paid yet.
- Check withholding tax credits before the final payment.
- Record every payment with its RRR or DIN and have it confirmed.
- Attach the evidence of payment to the return.
How to record a payment step by step, with its reference and receipt, is covered in recording a Nigerian tax payment with its RRR.
General guidance only, not advice on your own circumstances. Tax and payroll rules change: check the current position with the authority or your adviser.
