Remitting Nigerian withholding tax on time

When a Nigerian business must hand over withholding tax it deducted, what late remittance and failing to deduct cost, and a monthly routine.

By Achekam · 11 October 2026 · 4 min read · For Running a business businesses in Nigeria

The money you withhold from a supplier is not yours. From the moment you pay the supplier net, the deducted amount belongs to the tax authority, and you are holding it for them. Businesses that forget this tend to find out the expensive way, usually when cash is tight and the withheld amounts have quietly been spent on something else.

This article covers the remittance deadline, the charges for remitting late, the much heavier penalty for not deducting at all, and a routine that keeps the deductions moving from your books to the authority each month.

The 21st of the following month

Withholding tax deducted in a month must reach the Nigeria Revenue Service by the 21st of the following month. Deductions made from payments in June, for example, are due by 21 July. The NRS lists the date in its tax calendar alongside VAT, which shares the same day.

Not all withholding goes to the NRS. Tax withheld from payments to individuals is generally a State matter, and the research behind Achekam found the remittance dates of the State revenue services uncertain. Achekam lists every State Internal Revenue Service and the FCT-IRS but leaves State filing and payment to each State's own channel. If you pay individuals, confirm the State rule with your adviser rather than assuming the 21st.

Achekam's filing calendar sets Nigerian deadlines at the end of the day in Lagos time, and it leaves out any deadline whose rule is still awaiting approval, saying why. A missing date is a prompt to check, not permission to skip.

A yearly charge plus interest on late remittance

Withholding tax that is not remitted by the 21st attracts a charge of 10% a year plus interest, under section 105 of the Nigeria Tax Administration Act 2025. Because it runs as a yearly rate, the cost grows with every month the money stays in your account.

There is a second risk alongside it. A withholding return filed late or wrongly falls under the general penalty for late or incorrect returns, which costs ₦100,000 for the first month and ₦50,000 for each month after. Remitting and filing are separate duties, so do both on time.

The penalty for not deducting at all

Failing to deduct withholding tax in the first place is treated far more harshly: it attracts a 40% penalty under section 107 of the same Act. And the tax itself does not disappear because you forgot to deduct it.

The practical lesson is that the expensive mistake happens at the payment run, not at the month end. A business that deducts correctly and remits a week late pays a time-based charge. A business that never deducted faces the 40% penalty on top of finding the money from its own pocket, since the supplier has already been paid in full. The rates that decide what to deduct, 5% on resident consultancy and professional fees and 10% for non-residents among them, are set out in deducting withholding tax from Nigerian suppliers.

The NRS explains who must deduct tax at source, what the withholding return must show for each payee, which transactions are exempt, and the consequences of failing to deduct or remit on its withholding tax page.

Paying and recording the authority's reference

Payment to the NRS goes through its own channels. Rev360, the NRS self-service system launched on 30 April 2026 to replace TaxPro Max, covers registration, filing and payments.

Whatever channel you use, the payment ends with an authority reference: an RRR or a DIN. That reference is your proof, and it should travel with the payment everywhere it is recorded.

Achekam records a Nigerian tax payment against the authority's own reference and receipt. It never generates a payment reference itself, and a second person must confirm the payment before it counts. Achekam does not validate the format of an RRR or DIN, so the person confirming should compare the reference against the receipt character by character. A transposed digit can leave a payment unallocated at the NRS while your records say all is well. Recording these references is covered in more depth in recording Nigerian tax payments with an RRR.

Giving suppliers proof of what you withheld

Your supplier can only use the deduction as a credit if it can show the tax was withheld and paid over. Each month, after remitting:

• send each affected supplier a schedule of the invoices, the amounts withheld and the rate applied;
• include the payment reference you remitted under;
• keep a copy of what you sent with the remittance evidence.

Suppliers who receive this regularly stop phoning about short payments, and your own records are ready if the NRS asks how a deduction was passed on.

A monthly withholding routine

Two habits make the routine stick. Keep the withheld money in view, for instance by noting the liability each week, so it is never mistaken for spare cash. And make one named person responsible for the 21st, with a deputy for the months they are away.

For every Nigerian date in one place, see the Nigerian tax calendar. This month, check that last month's deductions were paid over in full, and if anything is outstanding, pay it now: the yearly charge is still running.

General guidance only, not advice on your own circumstances. Tax and payroll rules change: check the current position with the authority or your adviser.