If you’re reading this and your palms are getting sweaty, good. That means you still have a healthy fear of FIRS — and that fear might just save your business this year.
2025 is not the year to play games with Nigerian tax authorities. They’ve upgraded their systems, tightened their processes, and honestly, they’re hungrier than ever.
While you were busy perfecting your product or scaling your service, FIRS was busy perfecting the art of finding businesses that think they can fly under the radar.
The truth is, most business owners don’t wake up planning to get fined by FIRS. But somehow, they end up with penalty letters that make their monthly rent look like pocket change. How does this happen? Simple — they ignore the warning signs until it’s too late.
Here are the five red flags that scream “FIRS is coming for you” and exactly how to fix them before they become expensive problems.
Sign #1: You’re Still Operating Without a TIN
Listen, if you’re running a business in 2025 without a Tax Identification Number, you’re basically walking around without clothes and wondering why people are staring.
Your TIN is not optional. It’s not something you get “when you’re ready.” It’s the foundation of your entire tax existence. No TIN means you don’t exist in FIRS’ system — until they find you. And when they do, they won’t just ask for your TIN. They’ll ask for all the taxes you should have been paying while you were invisible.
The Wake-Up Call: Banks are now mandated to request TINs for business transactions above certain thresholds. is your business vying for Government contracts? Forget it without a TIN. Or is it for Major supplier projects? They’re asking for it too. You’re not just risking fines — you’re limiting your business growth.
The Fix (Takes 24-48 Hours):
- Visit any FIRS office or go online to firs.gov.ng
- If you’re a registered company, your TIN might already exist through CAC
- For business names, register directly with FIRS or through the Joint Tax Board
- Cost? Free. Excuse for not having one? None.
Pro tip: Get your TIN even if you’re not making money yet. Prevention is cheaper than penalty letters.
Sign #2: You’ve Been Collecting VAT But Not Remitting It
Oh, this one is dangerous. Really dangerous.
You know that 7.5% you’ve been adding to your invoices? That money was never yours. You’ve been holding government money, and every day you keep it is another day you’re technically in debt to FIRS.
Some business owners think they’re clever — “I’ll just stop charging VAT and no one will notice.” Wrong. If you’ve charged VAT even once, you’re already on their radar. Stopping won’t erase your history; it’ll just add “tax evasion” to your list of problems.
The Wake-Up Call: FIRS can audit your bank statements. They can see every invoice you’ve issued. If there’s a pattern of VAT collection without remittance, you’re not just looking at the original amount — you’re looking at penalties, interest, and possible criminal charges.
Read Also: VAT vs CIT: What is the Difference?
The Fix (Do This Today):
- Calculate how much VAT you’ve collected but haven’t remitted
- File all outstanding VAT returns immediately
- Pay what you owe (including penalties if you’re late)
- Set up automated monthly filing reminders
- If the amount is overwhelming, approach FIRS about a payment plan
Reality check: The penalty for not filing VAT returns is ₦50,000 for the first month, then ₦25,000 for each additional month. That money adds up faster than a Lagos traffic jam.
Sign #3: Your Business Makes Over ₦25 Million But You’re Not Registered for VAT
Success has its responsibilities, and VAT registration is one of them.
If your business crosses the ₦25 million annual revenue threshold, VAT registration isn’t a suggestion — it’s the law. And here’s the thing about FIRS: they’re getting really good at tracking business revenue through multiple sources.
Bank statements, customer complaints, social media advertising spend, online payment processors — they’re building a picture of your business income from angles you didn’t even know existed.
The Wake-Up Call: Think you can hide ₦25 million in revenue? In 2025? With digital payments, social media presence, and interconnected banking systems? You’re dreaming. The bigger you get, the easier you are to spot.
The Fix (This Week):
- Calculate your actual annual revenue (be honest with yourself)
- If you’re over ₦25 million, register for VAT immediately
- If you’re close but not quite there, consider voluntary registration
- Start charging and remitting VAT on all future transactions
- File returns for past periods if you should have been registered earlier
Insider secret: Voluntary VAT registration (even under ₦25M) can actually boost your business credibility with corporate clients.
Sign #4: You Have Employees But You’re Not Handling PAYE
Congratulations on growing your team! Now, welcome to being an unpaid tax agent for the government.
The moment you hire your first employee, you become responsible for deducting their income tax and remitting it to your state internal revenue service. Miss this, and you’re not just in trouble with FIRS — you’re in trouble with your state tax authority too.
The Wake-Up Call: Employee payroll records exist. Bank transfer records exist. If you’re paying salaries but not remitting PAYE, both your employees and the tax authorities will eventually notice. Your employees might get tax bills they can’t pay, and you’ll get penalty bills that will make you question your life choices.
The Fix (Next Payroll Cycle):
- Register with your state’s internal revenue service
- Set up proper payroll software that calculates PAYE automatically
- Start deducting and remitting PAYE for all employees
- File monthly PAYE returns by the 10th of each month
- If you’ve been paying salaries without PAYE, calculate back taxes and approach the authorities proactively
Important note: PAYE is a state tax, not federal. Don’t send it to FIRS — send it to your state revenue service.
Sign #5: You’re Filing Returns But Consistently Showing Zero Profit
Here’s where many businesses shoot themselves in the foot.
You diligently file your Company Income Tax returns every year, but somehow your business always makes exactly zero profit. Every year. Without fail. Meanwhile, your Instagram is showing new equipment, office upgrades, and business expansion.
FIRS officers aren’t stupid. They know the difference between a genuinely struggling business and creative accounting.
The Wake-Up Call: Consistent zero-profit filing while maintaining business operations is a red flag that practically shouts “audit me!” FIRS has the power to reconstruct your income based on your lifestyle and business expenses. When they do that calculation, the numbers rarely favor you.
The Fix (Before Your Next Filing):
- Review your profit and loss statements with a qualified accountant
- Ensure your business expenses are legitimate and properly documented
- If you’ve been under-reporting, consider voluntary disclosure
- Separate personal and business expenses clearly
- File amended returns if necessary
Truth bomb: Paying some tax is always cheaper than getting caught not paying tax you owe.
The Emergency Action Plan
If you recognized yourself in multiple signs above, don’t panic — but do act fast:
- Week 1: Get your TIN sorted and register for any missing tax obligations
- Week 2: Calculate what you owe and file outstanding returns
- Week 3: Set up systems to stay compliant going forward
- Week 4: Consider getting professional help if the numbers are overwhelming
The Bottom Line
FIRS fines aren’t like parking tickets you can ignore until they go away. They compound, they multiply, and they can literally shut down your business.
The signs are there. The systems are tightening. And 2025 is not the year to gamble with Nigerian tax compliance.
But here’s the good news: every single one of these problems is fixable. Some will cost you money, yes. But fixing them now will cost you far less than waiting for FIRS to fix them for you.
Remember, in the game of business taxes, there are only two types of people: those who pay their taxes on time, and those who pay their taxes plus penalties later. Which one do you want to be?
The choice is yours. But choose quickly — FIRS is watching, and they’re not known for their patience.
