UNDERSTANDING TYPES OF TAX ASSESSMENT IN NIGERIA

Introduction

Understanding the types of tax assessments in Nigeria is essential for every taxpayer—whether an individual, a small business owner, or a multinational corporation. The Nigeria Tax Act (NTA) 2025 and the Nigeria Tax Administration Act (NTAA) 2025 have introduced significant changes to how tax assessments are conducted, making compliance more structured and enforcement more robust.

A tax assessment is the process by which the tax authority determines a taxpayer’s liability for a particular tax period. This can occur through various methods, ranging from the taxpayer’s voluntary declaration to the tax authority’s estimate based on available information. The type of assessment issued can significantly affect a taxpayer’s liability, compliance obligations, and rights of objection and appeal.

This comprehensive guide examines the various types of tax assessments in Nigeria under the NTA 2025 framework, covering self-assessment, best of judgment assessment, additional assessments, and the consequences of non-compliance.

The Pain Points: Why Tax Assessments Matter Now More Than Ever

The Self-Assessment Trap

Under the NTA 2025, Nigeria operates on a “Self-Assessment” basis. By March 31 each year, every employee and self-employed person is required to file a return stating exactly what they earned in the previous year . The tax authority presumes every taxable person is honest and responsible, trusting that they will comply with their tax payment without any demand . However, failure to file or inaccurate filing carries severe consequences. The tax authority will look at bank inflows and assume 100% of it is taxable profit .

The Best of Judgment Risk

When taxpayers fail to comply with self-assessment requirements, the tax authority is empowered to issue a Best of Judgment Assessment (BOJA) . This is an estimate of tax liability made when complete tax returns are not submitted. BOJA is often unfavourable to the taxpayer because the tax authority uses its discretion and available information to estimate liability . However, there is hope: courts have held that a valid BOJ assessment must satisfy “the highest quality and standard,” and the onus of showing the fairness and reasonableness of the assessment rests with the taxing authority .

The Statute of Limitations Ambiguity

Under the NTAA 2025, the tax authority can raise an additional assessment within six years where a taxpayer has not been assessed or has been under-assessed . However, if a tax audit has commenced within the six-year limitation period, the audit may continue beyond the time limit . In cases of deliberate misstatement, the tax authority can raise assessments at any time without limitation . This creates significant exposure for taxpayers who may have inadvertently under-reported income.

The Final and Conclusive Rule

If a taxpayer fails to object within the prescribed 30-day period, the assessment becomes final and conclusive . However, this rule has limits. Courts have held that an assessment becomes final and conclusive only with regard to the amount of tax, not the validity of the assessment. If the assessment is unlawful, the taxpayer may still challenge it .

What Is a Tax Assessment?

A tax assessment is the determination of a taxpayer’s liability for a particular tax period. It can be the result of a voluntary declaration by the taxpayer or a determination made by the tax authority based on available information. The NTA 2025 and NTAA 2025 establish the legal framework for various types of assessments, each with specific rules, procedures, and consequences.

Types of Tax Assessment

1. Self-Assessment

What It Is: Self-assessment is the practice that permits every company and every taxable person to file a return declaring their actual income with the tax authority in each year of assessment without being issued any notice or demand . It is the most common form of assessment today, promoting voluntary compliance, especially under the digital tax system .

Who Must File: Under the NTAA 2025, it is mandatory for every taxable person to submit a self-assessment tax return . This includes:

Every company (including those exempted from incorporation)
Non-resident companies that derived profit from or are taxable in Nigeria
Companies that have ceased operations permanently
Individuals who are taxable
Employers and employees

Key Features: The tax authority presumes every taxable person or company in Nigeria is honest and responsible . By March 31 each year, every employee and self-employed person is required to file a return stating exactly what they earned in the previous year . The tax authority has the legal right to cross-reference a taxpayer’s claim with bank records and social media footprint .

Consequences of Failure: A taxable person who fails or refuses to file return or knowingly files incomplete or inaccurate returns shall be liable to pay outstanding tax and an administrative penalty of ₦100,000 for the first month and ₦50,000 for each subsequent month the act continues .

2. Government (or Tax Authority) Assessment

What It Is: If a taxpayer fails to submit returns, the tax authority prepares an assessment based on available records. It is often a conservative estimate and usually higher than what self-assessment would produce .

When It Applies: This type of assessment is issued when the taxpayer has not complied with the self-assessment filing requirement. The tax authority uses whatever information is available to determine the taxpayer’s liability.

3. Best of Judgment Assessment (BOJA)

What It Is: A Best of Judgment Assessment is applied when returns are false, unsatisfactory, misleading, or when there is a failure to file returns. The tax authority uses its discretion and available information to estimate tax liability, typically unfavourably to the taxpayer .

Key Legal Principles: Under Section 65 of the Companies Income Tax Act, the tax authority is empowered to make BOJ assessments. The Court of Appeal has held that a valid BOJ assessment must satisfy “the highest quality and standard,” and the onus of showing the fairness and reasonableness of the assessment rests with the taxing authority .

The tax authority must:

Make an honest and bona fide judgment
Base the judgment on some material placed before it
Fairly consider all material placed before it
Make a decision that is reasonable and not arbitrary as to the amount of tax due
Not investigate or scout for additional material if it finds some material on which it can reasonably act

Practical Considerations: A tax authority cannot impose income tax based on a company’s assets rather than its profits. In FIRS v. Agromix Nig. Ltd (2024), the Court of Appeal held that the value of a company’s property cannot be used as turnover unless the company is in the process of winding up or disposing its properties .

Training on BOJA: The Nigeria Governors’ Forum has provided training on BOJA approaches, including:

Business Economics Approach
Capital Statement Approach
Incomplete Records Reconstruction Approach
Means Test Approach

4. Estimated Assessment

What It Is: An estimated assessment is based on reasonable assumptions or comparative data when sufficient records are not available. It serves as a temporary assessment until accurate records are provided .

When It Applies: This type of assessment is used when the taxpayer’s records are incomplete or unreliable. The tax authority makes reasonable estimates based on available information.

5. Jeopardy or Protective Assessment

What It Is: A jeopardy or protective assessment is used when the tax authority believes that delaying assessment may result in loss of tax revenue. This occurs when a taxpayer is about to leave Nigeria or transfer assets to avoid tax, or when a company faces imminent liquidation .

Purpose: This assessment secures tax payment before assets or funds disappear. It protects the government’s interest in collecting tax revenue.

6. Additional or Back Duty Assessment

What It Is: If new information surfaces after filing (e.g., undeclared income), the tax authority can issue a back duty assessment to correct underpaid taxes .

Statutory Framework: Under Section 36(1) of the NTAA 2025, the relevant tax authority is empowered to raise an assessment or additional assessment within six years where a taxable person has either not been assessed or has been under-assessed .

Extension of Time: Where a tax audit has commenced within the six-year limitation period, the audit may continue beyond the time limit, with additional assessments raised accordingly .

Exception: In cases of deliberate misstatement, the tax authority can raise assessments at any time without limitation to recover lost tax .

Time Limit and WHT Credits: Where a monetary liability claim is disputed on the ground that the claim is statute-barred, the onus is on the tax authority to prove that the debt was acknowledged or that a part payment was made so as to revive the cause of action .

7. Final and Conclusive Assessment

What It Is: Once an assessment is accepted—or not appealed within the statutory timeframe—it becomes binding and legally enforceable .

The 30-Day Rule: A taxpayer must lodge a notice of objection within 30 days from the date of service of the notice of assessment .

Important Distinction: Courts have held that an assessment becomes final and conclusive only with regard to the amount of tax. It is not final and conclusive when the validity of the assessment is in issue . Failure to object within time is of no moment in a case in which the taxpayer’s objection turns on the validity of the assessment .

Assessment Procedures

Self-Assessment Process

The self-assessment process under the NTAA 2025 involves the following steps:

Filing: The taxpayer files a return declaring income and calculating tax liability .
Verification: The tax authority may verify the information provided in the self-assessment return through a tax audit .
Payment: The taxpayer remits the tax due.

Filing Deadlines:

Companies (existing): Not more than six months after the end of its accounting year
Newly incorporated companies: Within 18 months from incorporation or six months after the accounting period, whichever is earlier
Employers: Not later than 31 January of each year
Individuals and employees: Annually by 31 March

Objection Procedure

If a taxpayer disputes an assessment, they may:

File a notice of objection within 30 days from the date of service of the assessment .
Specify precise grounds of objection .
If dissatisfied with the tax authority’s refusal to amend the assessment, appeal to the Tax Appeal Tribunal within 30 days of the refusal .

The notice of appeal must contain:

The name and address of the applicant
The official number and the date of the relevant notice of assessment
The amount of the assessment, total or chargeable income, and tax charged
The precise grounds of appeal
Address for service of notices
The date of service of notice of refusal

Tax Audits

A tax authority can initiate a tax audit under various circumstances:

Self-assessment confirmation
Routine audits
Third-party information
Risk profiling

The statute of limitations for tax audits is typically six years, with exceptions for deliberate misstatements .

How Qeeva Advisory Helps with Tax Assessment Compliance

At Qeeva Advisory, we understand that navigating tax assessments under the NTA 2025 can be complex. Our team of experienced professionals helps Nigerian businesses and individuals understand their tax obligations, file accurate returns, and manage tax disputes effectively.

Our Core Services

Advisory Services Nigeria – Our advisory professionals help you understand your tax assessment obligations, file accurate returns, and develop compliance strategies.

Tax Strategies and Planning – We help you structure your tax affairs to minimise risk and ensure compliance with assessment requirements.

Regulatory Compliance – We ensure your tax returns meet all regulatory requirements and comply with the NTA 2025 and NTAA 2025.

Bookkeeping Services – Accurate records are essential for tax assessments. Our bookkeeping services ensure your financial records are accurate and complete.

Risk Management – We help you identify and manage risks associated with tax assessments, including audit risks and assessment challenges.

Frequently Asked Questions

Q: What is a self-assessment tax return?
A: A self-assessment tax return is a declaration of income and tax liability that every taxable person must file annually. It is mandatory under the NTAA 2025 .

Q: What is the deadline for filing a self-assessment return?
A: Individuals must file by 31 March each year. Companies must file within six months of the end of their accounting year .

Q: What happens if I don’t file a self-assessment return?
A: You may be subject to a ₦100,000 penalty for the first month and ₦50,000 for each subsequent month, plus interest on unpaid tax .

Q: What is a Best of Judgment Assessment?
A: A BOJ assessment is an estimate of tax liability made by the tax authority when returns are false, unsatisfactory, or not filed. It is typically unfavourable to the taxpayer .

Q: What is the time limit for additional tax assessments?
A: Additional assessments must be made within six years of the year of assessment, except in cases of deliberate misstatement .

Q: What is the 30-day rule for tax objections?
A: A taxpayer must lodge a notice of objection within 30 days of receiving an assessment. Failure to do so may make the assessment final and conclusive .

Q: Can I challenge an assessment that has become final and conclusive?
A: Yes, if the challenge relates to the validity of the assessment rather than the amount. An assessment is not final and conclusive when its validity is in issue .

Q: What are the consequences of filing an inaccurate return?
A: You may be liable for outstanding tax, penalties of ₦100,000 (first month) and ₦50,000 (subsequent months), and interest .

The Bottom Line

Understanding the types of tax assessments in Nigeria is essential for every taxpayer. The NTA 2025 and NTAA 2025 have introduced significant changes to the assessment process, making compliance more structured and enforcement more robust.

Key Takeaways:

Understand the Self-Assessment Obligation: Every taxable person must file a self-assessment return declaring income and calculating tax liability. Failure to file or inaccurate filing carries severe penalties .

Know the Best of Judgment Risk: If you fail to file or file inaccurate returns, the tax authority may issue a BOJ assessment. This is often unfavourable and may be difficult to challenge .

Be Aware of the Statute of Limitations: The tax authority can raise additional assessments within six years, and in cases of deliberate misstatement, at any time .

Object Within 30 Days: If you dispute an assessment, you must file a notice of objection within 30 days. Failure to do so may make the assessment final and conclusive .

Maintain Proper Records: Accurate records are essential for defending your position in a tax assessment or audit .

Your job is to be prepared. Understand the types of tax assessments. File accurate returns. Maintain proper records. Seek professional guidance.

With the right approach and the right partner, you can turn tax assessment compliance from a potential burden into a manageable and transparent process.

Reference Links / Sources

LinkedIn – Understanding Tax Assessments in Nigeria – 7 key types of tax assessments including self-assessment, BOJ, estimated, jeopardy, and additional assessments

BusinessDay – Taxation of Personal Income – Self-assessment for individuals, tax rates, filing deadlines, and penalties for non-compliance

G Elias – FIRS v. Agromix Nig. Ltd (2024) – BOJ assessments must be based on profits, not assets; fairness and reasonableness standard

Chambers and Partners – Tax Controversy 2026 – Tax audit initiation, six-year statute of limitations, and dispute resolution stages

Olaniwun Ajayi – Additional Assessment Time Limit – Section 66 CITA on six-year limit, WHT credits, and acknowledgment of liability

LinkedIn – Self Assessment Under NTAA 2025 – Self-assessment requirements, mandatory filing for all taxpayers, and penalties

LinkedIn – Self Assessment Process 2026 – Self-assessment filing deadline, bank record cross-referencing, and social media footprint verification

LinkedIn – Best of Judgment Assessment Training – BOJA approaches including Business Economics, Capital Statement, Incomplete Records Reconstruction, and Means Test

LinkedIn – Section 36 NTAA Additional Assessments – Six-year limitation period, audit continuation beyond time limit, and deliberate misstatement exception

Academic Repository – Tax Objection and Appeal – 30-day objection deadline and notice of appeal requirements

Chambers and Partners – Tax Audit Initiation – Tax audit circumstances and statute of limitations

Ikeyi Shittu & Co – BOJ Assessment Case Law – Court of Appeal ruling on BOJ validity, final and conclusive assessment limits, and fairness standard

Let’s Talk About Your Tax Assessment Needs

Navigating tax assessments under the NTA 2025 can be complex. At Qeeva Advisory, we understand the challenges faced by Nigerian businesses and individuals in understanding their tax obligations, filing accurate returns, and managing disputes.

Whether you need help with self-assessment filing, tax audit support, or dispute resolution, we are here to support you.

📞 Call us: (+234) 802 320 0801, (+234) 807 576 5799

📧 Email: info@qeeva.com

📍 Visit us: 5, Ishola Bello Close, Off Iyalla Street, Alausa, Ikeja, Lagos, Nigeria

Contact us today to schedule a consultation. Let us help you navigate tax assessments with confidence.

Your journey to tax compliance starts with a conversation. Let’s talk.

Understanding Types of Tax Assessment in Nigeria

UNDERSTANDING TYPES OF TAX ASSESSMENT IN NIGERIA

Introduction