Running a business in Nigeria requires more than just selling products or services. To stay afloat and grow, companies must comply with government regulations, tax laws, and corporate governance standards. Unfortunately, many businesses — especially small and medium-sized enterprises (SMEs) — make compliance mistakes that lead to penalties, reputational damage, or even business closure.
At Faturoti Taiwo & Co., Chartered Accountants in Lagos, we help businesses stay compliant and avoid costly errors. Here are the most common compliance mistakes Nigerian businesses make and how to avoid them.
Failing to Register Properly with CAC
Many SMEs start operations without registering with the Corporate Affairs Commission (CAC). This exposes them to:
- Difficulty opening corporate bank accounts
- Lack of legal protection
- Missed opportunities for contracts and funding
Solution: Ensure your business is registered with CAC and file annual returns on time.
🔗 Learn how to file CAC annual returns
Not Registering for Tax (TIN)
A Tax Identification Number (TIN) is mandatory for businesses in Nigeria. Operating without one means you cannot:
- Open corporate accounts
- Access government contracts
- File taxes legally
✅ Solution: Register for a TIN with the Federal Inland Revenue Service (FIRS) or relevant State Internal Revenue Service.
🔗 Register for TIN via FIRS
Missing Tax Filing Deadlines
Late filing of VAT, PAYE, WHT, and Companies Income Tax (CIT) often leads to heavy penalties. Both LIRS (Lagos Internal Revenue Service) and FIRS enforce strict deadlines.
Solution: Keep a tax compliance calendar or work with a tax consultant to stay ahead of due dates.
🔗 See LIRS filing guidelines
Poor Payroll Compliance (PAYE & Pensions)
Many businesses under-deduct or fail to remit Pay As You Earn (PAYE) tax and pension contributions for staff. This can result in audits, fines, and disputes with employees.
Solution: Remit PAYE to LIRS by the 10th of every month and comply with pension laws under the Pension Reform Act.
Ignoring Withholding Tax (WHT) Obligations
Withholding tax is often misunderstood by SMEs. Some fail to deduct, while others deduct but do not remit. This exposes businesses to double taxation and penalties.
Solution: Deduct and remit WHT to the relevant authority by the 21st of the following month.
Weak Corporate Governance
Lack of proper record-keeping, board meetings, and shareholder documentation puts businesses at risk of legal disputes and audit failures.
Solution: Maintain proper corporate records and implement internal controls.
Using Personal Accounts for Business Transactions
Mixing personal and business finances is one of the biggest compliance mistakes. It makes tax filing messy and exposes owners to unnecessary liabilities.
Solution: Open a corporate bank account and separate personal and business expenses.
Ignoring Statutory Filings Beyond Tax
Apart from taxes, businesses must also comply with:
- National Social Insurance Trust Fund (NSITF)
- Nigeria Social Insurance (NSITF/ITF contributions)
- Pension Commission (PenCom) returns
Solution: Work with professionals to ensure all statutory filings are up-to-date.
How Faturoti Taiwo & Co. Helps Businesses Stay Compliant
At Faturoti Taiwo & Co., we specialise in:
- Tax registration and filing (FIRS & LIRS)
- CAC annual returns and corporate compliance
- Payroll tax and pension remittances
- Business advisory for SMEs
Contact us today to keep your business compliant and penalty-free.
Compliance is not optional for Nigerian businesses — it’s the foundation of growth and credibility. By avoiding these common compliance mistakes, your company can build trust, secure funding, and expand confidently.
With the right accounting and tax experts like Faturoti Taiwo & Co., you’ll have peace of mind knowing your compliance is in safe hands.