Tax Authorities in Nigeria: Comprehensive Overview of FIRS & SIRS
Introduction to the Nigerian Tax System
Nigeria’s tax system is the backbone of government revenue, supporting development and public services. Tax authorities play a crucial role in enforcing Nigeria’s tax regulations and ensuring citizens and businesses pay their fair share. Effective tax administration helps fund roads, schools, hospitals, and security, making tax authorities central to governance and national development.
Key Tax Authorities in Nigeria
Nigeria’s tax administration is divided between federal and state levels, primarily handled by two main bodies: the Federal Inland Revenue Service (FIRS) and the State Internal Revenue Service (SIRS).
Federal Inland Revenue Service (FIRS)
Establishment and Legal Framework:
The FIRS was established under the Federal Inland Revenue Service (Establishment) Act, 2007. It is empowered by federal laws and operates under the guidance of the Federal Ministry of Finance.
Structure and Core Functions:
FIRS is led by an Executive Chairman and a management board. It is structured into departments handling tax collection, audit, taxpayer services, policy, and compliance.
Types of Taxes Administered:
FIRS is responsible for collecting the following taxes, primarily for the federal government:
- Company Income Tax (CIT)
- Personal Income Tax (for non-residents, armed forces, police, and Abuja residents)
- Value Added Tax (VAT)
- Stamp Duties
- Petroleum Profit Tax
- Capital Gains Tax (for companies)
- Education Tax
Source: FIRS Official Website
State Internal Revenue Service (SIRS)
Role and Formation:
Every Nigerian state has its own SIRS, established by state legislation. They report to state governments through the respective State Boards of Internal Revenue.
Structure and Relationships:
SIRS is managed by an executive chairman and a team responsible for assessment, collection, and enforcement of state-levied taxes.
Taxes Handled:
SIRS primarily collects:
- Personal Income Tax (for residents, except those under FIRS' jurisdiction)
- Withholding tax
- Capital Gains Tax (individuals)
- Consumption tax (e.g., in hotels and restaurants)
- Development levy
Source: Lagos State IRS, [Other State IRS websites]
Comparing FIRS and SIRS – Roles, Powers, and Differences
| Feature | FIRS | SIRS |
|---|---|---|
| Jurisdiction | Federal tax (companies & special cases) | State tax (mainly individuals, SMEs) |
| Key Taxes | CIT, VAT, Petroleum Tax, etc. | PIT, development levy, consumption tax |
| Law Enforcement | Federal laws (FIRS Act) | State laws (Personal Income Tax Act) |
| Overlap | Some PIT cases | Shared info, remit to FIRS in some cases |
| Cooperation | Collaborates with SIRS on audits, info | Works with FIRS for tax data exchange |
FIRS handles federal taxes, while SIRS focuses on state and individual taxes. They may cooperate for audits and data sharing if an individual or business falls under both jurisdictions.
Major Taxes Administered in Nigeria
Company Income Tax
What is it?
A tax on profits of registered companies, paid annually to the FIRS.
Who Pays?
All companies (local and foreign) operating in Nigeria, except for small businesses with a turnover below ₦25 million.
Rates and Calculation:
- Standard rate: 30%
- Small businesses (₦25m–₦100m turnover): 20%
- Micro entities (below ₦25m turnover): 0%
Based on net profit as declared in audited financial statements.
More details here
Personal Income Tax
Who Handles Collection?
- FIRS for federal employees, armed forces, police, and Abuja residents
- SIRS for state residents and most workers
Taxpayer Obligations:
- Register with FIRS or SIRS (depending on employer/location)
- File annual returns and pay on declared income
Rates:
Progressive rates—between 7% and 24% based on income brackets.
Value Added Tax (VAT) & Other Relevant Taxes
VAT:
A 7.5% consumption tax on goods and services, collected by FIRS.
Other Taxes:
- Stamp Duties (on legal documents)
- Capital Gains Tax
- Education Tax (2.5% of assessable profit for companies)
Guide to VAT in Nigeria
Tax Compliance in Nigeria: Filing, Payment, and Enforcement
Tax Registration Processes
- Companies: Register with FIRS after company incorporation at CAC.
- Individuals: Register with SIRS (state of residence) or FIRS (special cases).
Filing and Payment Schedules
| Tax Type | Return Filing Deadline | Payment Deadline |
|---|---|---|
| Company Income Tax | 6 months after year-end | Same as filing |
| Personal Income Tax | March 31 (individuals) | 90 days after filing |
| VAT | 21st of every month | 21st of each month |
Late filing or non-payment attracts penalties and interest.
Compliance Tools and Innovations
- E-filing & Portals: FIRS and SIRS support online filing and payment.
- Self-Service: E-tax portals provide tax calculators, receipts, and downloadable forms.
- Audit Initiatives: Both FIRS and SIRS conduct random and targeted audits.
FIRS e-Services Portal, LIRS eTax
Recent Developments & Updates in Nigerian Tax Administration (2025)
- Digital Transformation: More automated platforms for returns, payment, and receipts.
- Policy Updates: Adjustments to rates and penalties to align with economic goals.
- Innovation: FIRS launched real-time taxpayer activity tracking; SIRS improved mobile app filing for easier compliance.
- Tax Credits: New incentives for SMEs and start-ups to boost tax compliance.
For latest policies and news:
FIRS Newsroom, LIRS News
Frequently Asked Questions (FAQs) on FIRS & SIRS
Who needs to register with FIRS/SIRS?
All companies (FIRS), all residents/workers (SIRS), and special categories like federal employees (FIRS).
Can you pay taxes online in Nigeria?
Yes. Use FIRS TaxProMax and various state IRS portals.
How do FIRS and SIRS resolve disputes?
Through harmonized tax forums, Tax Appeal Tribunals, and collaboration between federal and state agencies.
What are the consequences of tax evasion in Nigeria?
Penalties include fines, asset seizure, and possible jail time as per the Tax Administration Act.
Conclusion
FIRS and SIRS are at the core of Nigeria’s tax system—working together yet independently to collect taxes that drive development. For businesses and individuals, complying with tax laws means timely registration, accurate filing, and prompt payments. Stay updated via official portals, and use self-service tools to maintain compliance and avoid penalties.
Best Practices:
- Register promptly with the correct authority
- File returns and pay taxes on time
- Use online platforms for accuracy and convenience
- Keep up with changing tax laws and guidelines
Guide to Company Income Tax in Nigeria
FIRS Tax Portal
LIRS Self-Service eTax Portal
Nigerian Tax News and Updates
For more resources and tax tips, visit the FIRS, your state IRS portal, or consult updated Nigerian tax compliance checklists.
This article is up-to-date as of March 2025 and written using official resources and recent news from Nigerian tax authorities.