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With the 2026 transition to the Nigeria Revenue Service (NRS), tax errors that used to be ignored are now flagged automatically by AI-driven systems. Avoiding these common Withholding Tax (WHT) mistakes will save your business from the 40% non-deduction penalty and months of audit stress.
1. Using the Wrong Tax Authority
A frequent error is remitting WHT to the NRS (Federal) when it should have gone to the SIRS (State). Rule of thumb: If the vendor is a Limited Liability Company, pay the NRS. If they are an individual, freelancer, or enterprise, pay the state where they reside. See Federal vs State Taxes for more.
2. Forgetting to Double the Rate for ‘No TIN’ Vendors
In 2026, if a vendor cannot provide a valid Tax Identification Number, you must deduct tax at double the standard rate. Failing to do this makes you liable for the shortfall. Check WHT Rates in Nigeria to ensure you’re applying the correct 2026 percentages.
3. Not Reconciling Credit Notes Monthly
Many businesses pay WHT but never check if their digital credit notes were actually generated on TaxPro Max. Without these, you cannot reduce your Company Income Tax liability. Learn how to claim WHT credits properly. For professional reviews, contact KPMG Nigeria or visit the NRS official portal.”