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Understanding Nigerian Tax Compliance: VAT, WHT, and PAYE Explained

Comradic Team ·

The Tax Compliance Challenge

Nigerian businesses face a complex tax landscape. Between Value Added Tax (VAT), Withholding Tax (WHT), and Pay-As-You-Earn (PAYE), staying compliant requires constant attention and expertise. Non-compliance can result in penalties, interest charges, and even business closure.

VAT: Value Added Tax

VAT in Nigeria is charged at 7.5% on most goods and services. Businesses with annual turnover above NGN 25 million must register for VAT and file monthly returns with the Federal Inland Revenue Service (FIRS).

Key obligations:

  • Charge VAT on all taxable supplies
  • Issue VAT-compliant invoices
  • File monthly VAT returns by the 21st of the following month
  • Remit collected VAT to FIRS

WHT: Withholding Tax

Withholding Tax is an advance payment of income tax deducted at source. Rates vary from 5% to 10% depending on the type of payment and whether the recipient is a company or individual.

PAYE: Pay-As-You-Earn

PAYE is the system for collecting personal income tax from employees. Employers must deduct tax from employee salaries based on graduated tax rates and remit to the relevant State Internal Revenue Service.

How Comradic Automates Compliance

Comradic's AI Tax Agent automatically calculates VAT, WHT, and PAYE on every transaction. It generates FIRS-ready filings, sends reminders before deadlines, and keeps a complete audit trail. No more scrambling at month-end or risking penalties.

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