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The short answer
A Nigerian tax audit starts with a written notice giving at least seven days to produce records, can cover up to six years (longer for deliberate misstatement), and ends with an assessment you can object to within 30 days. Ignoring a records request costs ₦200,000 plus ₦10,000 a day under the Nigeria Tax Administration Act 2025.
A letter from the NRS or a state internal revenue service announcing a tax audit worries most small business owners. The process is set out in the Nigeria Tax Administration Act 2025, in force since 1 January 2026, and knowing the steps takes much of the fear out of it. In outline: the authority asks for records with a written notice, gives you a minimum period to respond, examines your books, proposes an assessment, and you have a fixed window to object before anything becomes final.
How an audit starts
PwC's Nigeria summary (reviewed 29 May 2026) says the tax authority may review returns after filing through desk examinations and monitoring exercises, which can include site visits and interviews, and that audits may be random or targeted. Federal and state authorities can also run joint audits: section 48 of the Act says that where one authority finds non-compliance with a tax belonging to another, it must refer it or invite that authority to a joint audit. A VAT review by the NRS can therefore lead to questions from your state about PAYE.
The formal step is a notice under section 57, which lets the authority require you to complete returns, produce books and documents, and give information. Section 57(1)(e) covers records held on computers, other devices or cloud services.
Your timelines and rights
| Stage | Rule | Section |
|---|---|---|
| Responding to a notice for records | Not less than 7 days from service | s.57(2) |
| Asking for more time | Written application before the notice period ends | s.57(4) |
| Visits to premises | At reasonable times; no private home without consent or a warrant | s.58 |
| Objecting to an assessment | Within 30 days of service of the notice of assessment | s.41(2) |
| Authority's reply to objection | Within 90 days, or the objection is upheld | s.41(6) |
| Paying an undisputed assessment | Within 30 days of service | s.49(2) |
| How far back | Generally six years; no limit for deliberate misstatement | s.36 |
The six-year limit matters. Section 36 lets the authority raise an additional assessment within six years, and an audit that started within that period can continue after it. PwC notes that where fraud, wilful default or deliberate misstatement is suspected, there is no time limit.
Documents usually requested
The Act does not publish a fixed list, but section 31 requires every taxable person to keep books and records that allow the tax liability to be worked out, in English, for at least six years. Expect requests for:
- Financial statements, or attested accounts for a small company, and tax computations.
- General ledger, sales and purchase records, invoices and receipts.
- Bank statements for every business account.
- Payroll records, PAYE schedules and remittance receipts.
- VAT returns, output and input VAT workings, and e-invoicing records where you use the NRS system.
- Withholding tax credit notes received and receipts for WHT you deducted.
- Fixed asset register and capital allowance schedules.
- Contracts, leases and stamped documents.
Invoices are likely to be asked for, so check yours carry the details on our invoice checklist.
Our guide to how long to keep tax records sets out a retention plan.
Penalties for not cooperating
Ignoring the process costs more than complying. Under section 108, failing to comply with a notice or to attend costs ₦100,000 on the first day and ₦10,000 for each further day. Failing to supply information or documents on request costs ₦200,000 on the first day and ₦10,000 a day after. Separately, section 102 penalises failure to keep books.
Worked example (illustrative figures)
A shop owner receives a records notice and ignores it for 10 days past the deadline. Under section 108(2) the penalty is ₦200,000 for the first day plus ₦10,000 × 9 further days = ₦90,000, a total of ₦290,000, before any tax the audit finds. Asking in writing for an extension before the deadline, under section 57(4), would have avoided it.
When the audit ends: objecting
At the end, the authority issues its findings and then a notice of assessment, which section 40 says must set out your rights. If you disagree, section 41 requires a written objection within 30 days stating the specific issues disputed with their amounts, the amendments you want, your justification, and the profit and tax you accept. Section 49(3) holds collection of the disputed amount until the objection is decided, but you must pay the part you accept. If the authority does not reply within 90 days, the objection is upheld. If you still disagree, you can appeal to the Tax Appeal Tribunal, and from there to the High Court on paying 20% of the disputed sum as security. See how to object to a tax assessment, and if an officer's conduct is the problem, the Tax Ombud.
Steps when the letter arrives
- Note the date of service and diarise the deadline in the notice and 30 days from any assessment.
- Check the letter is genuine by contacting the tax office through its official channels.
- Gather records for the years named, and send a covering list of what you provide.
- Ask in writing for more time before the deadline if you need it.
- Keep copies of everything you hand over, and get an acknowledgement.
- Consider an accredited tax agent; section 11(6) requires a paid representative to be accredited.
Where Pryme fits
Business accounts come with agents built by Pryme Intelligence that prepare work while a person approves above a set ceiling, and their actions are recorded, which helps explain who did what. Statements and receipts can be generated as verifiable documents through VerifyDoc.ai (receipts), so an auditor can check they are genuine and unaltered. See the Finance agent.
Questions people ask
How many years back can the tax office audit my business in Nigeria?
Generally six years under section 36 of the Nigeria Tax Administration Act 2025, with no limit where there is deliberate misstatement, fraud or wilful default.
How long do I have to respond to an NRS or state IRS records request?
The notice must give at least seven days from service (section 57(2)). You can apply in writing for an extension before the period ends.
What happens if I disagree with the audit result?
Object in writing within 30 days of the notice of assessment. The authority must respond within 90 days or your objection is upheld; you can then appeal to the Tax Appeal Tribunal.
Can tax officers enter my shop or home?
Section 58 allows access to business premises and records at reasonable times, but not a private dwelling without consent or a warrant.
Sources
- Nigeria Tax Administration Act 2025 (gazette copy) · accessed Oct 2026
- PwC Worldwide Tax Summaries: Nigeria corporate tax administration (reviewed 29 May 2026) · accessed Oct 2026
This article is general information, not financial, legal or tax advice. Products described are provided under the terms on this site and are subject to regulation and eligibility.