Will the Government Just Deduct Your Tax From Your Bank Account?

Filing a tax return and paying your tax are connected, but they are not the same step.

For individuals, freelancers and small business owners who handle their own tax affairs, understanding that difference can prevent an unpleasant surprise when a filing deadline approaches.

Filing your return does not mean automatic deduction

A tax return is essentially your declaration of the relevant information required by the tax authority.

Depending on the taxpayer and the type of income involved, this can include income from different sources, applicable deductions and other information needed to determine the tax position.

The Nigeria Tax Administration Act, 2025 separately addresses the payment of tax. It provides that tax due is to be paid by the due date for filing, either in one lump sum or through instalments, with the final instalment paid on or before the filing deadline.

So, if you file a return showing that you have tax to pay, you should not assume that submitting the return means the NRS will automatically take the amount from whatever money happens to be sitting in your bank account.

The taxpayer still has a payment obligation.

Think about it as three separate steps

For a freelancer, the process is easier to understand when you separate it into three parts.

First, you keep your financial records.

You track what you earned, relevant expenses, withholding tax and other payments or information that affect your tax position.

Second, you file your return.

You provide the required information to the tax authority so your income and tax position can be properly reported.

Third, you settle any tax that is due.

The NRS currently provides digital facilities for both tax filing and payments through its taxpayer self service platform.

The important point is that filing should not be confused with an automatic withdrawal from your personal or business bank account.

What if you do not have the money ready?

This is where the misconception can become costly.

Imagine a freelancer earns ₦8 million during the year and, after applying the relevant tax rules and accounting for tax already paid, has an outstanding tax liability.

Filing the return does not mean the NRS will simply look at the freelancer’s bank balance and take whatever amount is available.

The freelancer remains responsible for settling the tax due within the applicable timeframe.

That is why waiting until the filing date to think about the money needed for tax can create unnecessary pressure.

There is also a practical reason to keep track throughout the year. If your records are organised, you can have a clearer picture of your income and tax position before the filing deadline arrives.

What happens if tax remains unpaid?

The fact that tax is not automatically taken from your account does not mean an unpaid liability disappears.

The Nigeria Tax Administration Act contains provisions dealing with unpaid tax, including interest, penalties and recovery mechanisms. The Act also provides rules for assessments and the collection of tax that remains due.

This is why taxpayers should pay attention to both what they owe and when it is due.

The NRS taxpayer portal also provides a section for tracking outstanding tax obligations and deadlines.

Keep your tax money in your plans

For a freelancer, tax planning does not have to mean complicated calculations every week.

It can start with something much simpler: keeping your income and expense records organised and paying attention to your tax obligations as the year progresses.

If you receive payments from several clients, earn through foreign platforms or have tax deducted from some payments, keeping those records together makes it easier to understand your position when it is time to file.

You should know what you earned, what tax has already been deducted or paid and what may still be payable.

Filing your tax return is part of the process. Paying the tax due is another part.

Understanding that difference can help you avoid treating tax as a problem that only appears on filing day.

LessaTax helps freelancers, remote workers and small businesses organise their income, expenses, invoices, receipts and other financial records throughout the year, so they can have a clearer picture of their finances when tax obligations come due.