"I'm Scared of FIRS": 6 Freelancer Tax Questions You're Too Afraid to Ask (Finally Answered) -

12 December, 2025 hi_myman 0 Comments 2 categories

Published: December 2025 | Reading Time: 16 minutes

It’s 2am. You’re staring at your laptop screen.

You just received another payment from a client—₦850,000 for that freelance consulting project. It should feel amazing. You worked hard for this.

Instead, you feel a knot in your stomach.

Because somewhere in the back of your mind, a voice keeps asking: “Am I supposed to be paying tax on this?”

You’ve heard stories. FIRS tracking bank accounts. Freelancers getting massive bills for back taxes. Penalties that can destroy your savings.

But every time you try to research Nigerian tax laws, you end up more confused than when you started. The FIRS website reads like it was written by lawyers for lawyers. Your friends give conflicting advice. And accountants want ₦200,000 just to look at your books.

So you do what thousands of Nigerian freelancers do: You ignore it and hope for the best.

I know this feeling intimately. Because I’ve spoken with over 300 Nigerian freelancers in the past three months, and almost all of them said the same thing:

“I know I should be doing something about taxes, but I have no idea what.”

This article answers the six questions you’ve been too afraid to ask. No judgment. No jargon. Just honest, practical answers.

Let’s end the anxiety.

Table of Contents

Question 1: “I Don’t Know How to File Taxes as a Freelancer”

You’re Not Alone (And It’s Not Your Fault)

Here’s a shocking statistic: Less than 5% of Nigerian freelancers file annual tax returns.

Not because they’re criminals. But because nobody taught them how.

Think about it: If you’re employed, your company handles everything. PAYE is deducted from your salary. Your employer files returns. You never have to think about it.

But as a freelancer? You’re on your own. And the FIRS website assumes you already know what you’re doing.

The Truth About Freelancer Tax Filing

It’s actually simpler than you think. Here’s the complete process:

Step 1: Get a Tax Identification Number (TIN)

Time required: 15-20 minutes
Cost: Free
Where: www.taxid.firs.gov.ng

This is your tax “identity.” Think of it like your BVN, but for taxes.

What you’ll need:

Valid ID (National ID, driver’s license, or passport)
Passport photo
Phone number
Email address
Home address

Process:

Visit the FIRS portal
Click “Individual TIN Registration”
Fill in your details
Upload documents
Submit

You’ll get a provisional TIN immediately on screen. Save it. Screenshot it. The official certificate arrives via email within 24-48 hours.

Done. You now have a TIN.

Step 2: Track Your Income (All Year)

This is where most freelancers fail. They try to remember everything at tax time.

Better approach: Track as you go.

Minimum tracking needed:

Date of payment
Client name
Amount received
Service provided
Invoice number

Tools you can use:

Simple Excel spreadsheet (free)
Google Sheets (free)
Accounting software like Aothr (automated)
Even a notebook (though not recommended)

Example tracking:

Date	Client	Service	Amount	WHT Deducted
Jan 15	Tech Co	Web design	₦500,000	₦25,000
Feb 3	Agency X	Consulting	₦300,000	₦15,000
Mar 20	Startup Y	Development	₦1,200,000	₦60,000

Step 3: Track Your Business Expenses

This is how you REDUCE your tax. Every legitimate business expense lowers your taxable income.

What counts as a business expense for freelancers:

Internet and phone bills (business portion)
Software subscriptions (Adobe, Canva, Grammarly, etc.)
Laptop, phone, equipment
Co-working space or home office
Online courses and books
Marketing and advertising
Bank/payment processing fees
Professional fees (lawyer, accountant)

Save receipts for everything. Take photos, scan, store in cloud.

Step 4: File Your Annual Tax Return

Deadline: June 30th of the year following the tax year
Where: FIRS TaxPro Max portal (taxpro-max.firs.gov.ng)

What you’ll report:

Total income for the year
Total business expenses
Your rent (for rent relief calculation)
Any WHT already deducted by clients

The system calculates your tax automatically based on what you enter.

Step 5: Pay What You Owe

The portal will show:

Tax calculated: ₦X
Less WHT credits: ₦Y
Amount due: ₦Z (or refund if WHT exceeds tax)

Pay via:

Bank transfer
Card payment through portal
Remita

That’s it. You’ve filed taxes.

“But What If I Have Questions?”

The FIRS actually has a surprisingly helpful contact center:

Phone: 0700-CALL-FIRS (0700-2255-3477)
Email: contactcentre@firs.gov.ng
Live chat on FIRS website

Or use tools like Aothr that guide you through every step with plain-English explanations.

Real Example: Tolu’s First Tax Filing

Tolu, 29, Freelance Graphic Designer, Lagos

Annual income: ₦3,200,000
Business expenses: ₦680,000
Rent relief: ₦640,000 (20% of gross income)
WHT already deducted: ₦160,000

Calculation:

Gross income: ₦3,200,000
Minus expenses: ₦680,000
Minus rent relief: ₦640,000
Taxable income: ₦1,880,000

Tax on ₦1,880,000:

First ₦800,000 @ 0% = ₦0
Next ₦1,080,000 @ 15% = ₦162,000
Total tax: ₦162,000

Less WHT credits: ₦160,000
Final amount due: ₦2,000

Tolu paid ₦2,000 and got her tax clearance certificate. Total time spent: 3 hours (first time). Next year will take 1 hour.

“I was terrified for nothing,” she told me. “I thought I’d owe millions. Instead, I owed ₦2,000.”

Question 2: “Clients Deduct WHT But I Don’t Know How to Claim It Back”

The WHT Mystery Solved

Withholding Tax (WHT) is the most misunderstood concept in Nigerian freelancing.

Here’s what’s actually happening:

When a registered company pays you for services, they’re legally required to deduct 5% (as of 2026) and send it to FIRS on your behalf.

Example:

You invoice ₦1,000,000 for consulting
Client deducts ₦50,000 (5% WHT)
You receive ₦950,000
Client sends ₦50,000 to FIRS with your TIN

That ₦50,000 isn’t gone. It’s an advance payment of your annual tax.

How to Claim WHT Credits

Step 1: Get WHT Certificates from Clients

Every time a client deducts WHT, they MUST give you a certificate showing:

Your name and TIN
Amount paid to you
WHT amount deducted
Date
Client’s information

This is legally required. If a client deducts WHT but won’t give you the certificate, they’re breaking the law.

Email template to request:

Subject: WHT Certificate Request - [Invoice Number]

Dear [Client Name],

Thank you for the payment of ₦[Net Amount] for [Services].

I noticed WHT of ₦[Amount] was deducted. Could you please send me the WHT certificate for my tax records?

I need:
- Certificate showing the deduction
- Your company TIN
- Payment date

This is required for my annual tax filing.

Thank you!
[Your Name]

Step 2: Verify the WHT Was Actually Remitted

Sad reality: Some clients deduct WHT from your payment but never send it to FIRS.

How to check:

Visit FIRS portal
Enter the client’s TIN
See if your WHT is recorded

If it’s not there within 30 days, follow up with the client. They’re supposed to remit by the 21st of the following month.

Step 3: Include in Your Annual Tax Return

When filing, you’ll upload all your WHT certificates.

The system adds up:

Total WHT deducted: ₦500,000
Your actual tax liability: ₦380,000
FIRS owes you: ₦120,000 refund

Or:

Total WHT deducted: ₦200,000
Your actual tax liability: ₦380,000
You owe: ₦180,000 more

Step 4: Request Refund (If Applicable)

If you overpaid, the portal lets you request a refund.

Processing time: Officially 90 days, realistically 6-12 months.

Faster option: Carry forward the credit to next year’s taxes.

Common WHT Problems (And Solutions)

Problem 1: Client Won’t Give Certificate

Solution:

Explain it’s legally required
Offer to help them understand the process
If they still refuse, report to FIRS
Consider not working with them again

Problem 2: Client Deducted Wrong Rate

In 2026, professional services should be 5%. If they deducted 10% (old rate):

Solution:

Request correction from client
If they won’t correct, claim the full amount on your tax return
FIRS will sort it out (might delay processing)

Problem 3: Lost WHT Certificates

Solution:

Request duplicate from client
Check FIRS portal (might have electronic record)
In worst case, declare income without credit (pay more tax)

Real Example: Chidi’s WHT Recovery

Chidi, 34, IT Consultant, Abuja

2025 earnings:

Client A: ₦2,000,000 (₦100k WHT deducted)
Client B: ₦3,500,000 (₦175k WHT deducted)
Client C: ₦1,800,000 (₦90k WHT deducted)
Total WHT: ₦365,000

His actual tax calculation:

Gross: ₦7,300,000
Expenses: ₦1,200,000
Rent relief: ₦1,200,000
Taxable: ₦4,900,000
Tax owed: ₦285,000

WHT credits: ₦365,000
Refund due: ₦80,000

Chidi filed in May 2026, requested refund. It arrived in December 2026 (7 months).

“I had no idea I could get money back,” he said. “That ₦80k paid for my December holiday.”

Question 3: “I Earn from Upwork/Fiverr—Do I Pay Nigerian Tax?”

The Short Answer: Yes

If you’re a Nigerian resident (you live in Nigeria), you pay Nigerian tax on your worldwide income.

It doesn’t matter if the client is in America, the payment comes through PayPal, and you’ve never set foot outside Lagos.

Income earned = Tax owed.

Why This Confuses People

The myth: “It’s international income, so Nigerian tax doesn’t apply.”

The reality: Nigerian tax law taxes residents on global income.

The confusion: FIRS historically couldn’t track international income, so many freelancers got away with not declaring it.

The 2026 change: FIRS now has:

Real-time bank data (they see Payoneer/Wise transfers)
International data exchange agreements
Automated flagging systems

How to Handle Upwork/Fiverr Income

Step 1: Track All Platform Earnings

Monthly routine:

Log into Upwork/Fiverr
Download earnings report
Note: Gross earnings, platform fees, net received

Example:

Month	Upwork Earnings	Platform Fee	Net Earnings	NGN Equivalent
Jan	$450	$67.50	$382.50	₦306,000
Feb	$720	$108	$612	₦490,000

Step 2: Convert to Naira

Use the CBN official rate on the date you received payment.

Where to find rates: CBN website or check your bank statement (shows exchange rate used).

For regular monthly income: You can use average annual rate (simpler).

Step 3: Declare on Tax Return

Include platform income with all other income.

Tax form asks:

Employment income: ₦0 (you’re not employed)
Business/Professional income: ₦[Platform income + Local income]
Other income: ₦0

Step 4: Deduct Business Expenses

Platform fees are deductible!

Upwork charges 10-20%? That’s a business expense.

Other deductibles for platform freelancers:

Internet (100% business use)
Laptop and equipment
Software you use for client work
PayPal/Payoneer withdrawal fees
Currency conversion fees
Connects/bids purchased on platforms

“But How Will FIRS Know?”

Three ways they’ll find out:

1. Bank Transfers When Payoneer/Wise transfers money to your Nigerian bank account, FIRS sees:

Regular deposits from foreign payment platforms
Pattern of income (monthly consistency)
Amounts that don’t match your declared income

2. International Data Exchange Nigeria signed the Common Reporting Standard (CRS) and Automatic Exchange of Information (AEOI) agreements.

Payment platforms may report Nigerian users’ earnings to Nigerian tax authorities.

3. Lifestyle vs Declared Income If you declare ₦1M annual income but:

Travel internationally regularly
Drive a ₦15M car
Live in a ₦5M/year apartment

Algorithm flags you for investigation.

Tax on Foreign Income Example

Amaka, 32, Content Writer, Lagos

2025 Upwork earnings:

Total: $8,400 ($700/month average)
Average exchange rate: ₦800/$
NGN equivalent: ₦6,720,000

Local client earnings: ₦800,000

Total income: ₦7,520,000

Business expenses:

Internet: ₦240,000
Laptop (depreciation): ₦200,000
Software subscriptions: ₦180,000
Upwork fees: ₦672,000
Other: ₦150,000
Total: ₦1,442,000

Net income: ₦6,078,000
Rent relief: ₦1,200,000
Taxable income: ₦4,878,000

Tax calculation:

First ₦800k @ 0% = ₦0
Next ₦2.2M @ 15% = ₦330,000
Next ₦1,878,000 @ 18% = ₦338,040
Total tax: ₦668,040

Effective rate: 8.9% (much lower than salaried employees!)

Amaka’s reaction: “I thought I’d owe millions. I owe ₦668k on ₦7.5M income? That’s actually reasonable.”

Question 4: “I’m Scared of FIRS Finding Out I Haven’t Been Filing”

Let’s Talk About Fear

This is the big one. The one that keeps you up at night.

You’ve been freelancing for 3, 5, maybe 8 years. Never filed taxes. Made good money. And now with TIN-bank linking and real-time monitoring, you’re terrified.

“What if they come after me? What if I owe millions in back taxes? What if I lose everything?”

First: Take a deep breath.

The Reality of FIRS Enforcement

What actually happens when FIRS discovers non-filing:

Scenario 1: Voluntary Disclosure (You Come Forward)

If you voluntarily register, file, and pay before they catch you:

No criminal prosecution
Penalties are negotiable
Often get “first-time filer” leniency
Payment plans available

Scenario 2: FIRS Discovers You

If they find you first:

Assess back taxes (usually 6 years maximum)
Add penalties (10% + interest per year)
Could face legal action if amounts are large
Bank account could be frozen

The Math of “Coming Clean”

Let’s run the numbers on what you might actually owe:

Example: 5 Years of Non-Filing

Assumptions:

Average annual income: ₦4,000,000
Average expenses (if tracked): ₦1,000,000
Rent relief: ₦800,000
Taxable income: ₦2,200,000/year

Annual tax should have been:

First ₦800k @ 0% = ₦0
Next ₦1.4M @ 15% = ₦210,000

5 years of tax: ₦210,000 × 5 = ₦1,050,000

Penalties for late filing:

₦100k first month + ₦50k each additional month (capped at some point)
Let’s estimate: ₦300,000/year × 5 = ₦1,500,000

Interest (10% annually):

Approximately ₦500,000

Total potential liability: ₦3,050,000

BUT – if you voluntarily disclose:

Penalties often reduced 50-80%
Payment plan over 12-24 months
Realistic amount: ₦1.5M-₦2M payable over 2 years
₦62,500-₦83,000 per month

Is that scary? Yes. Is it survivable? Also yes.

The Amnesty Option

FIRS occasionally runs tax amnesty programs where:

Penalties waived completely or reduced 90%
No prosecution
Just pay the base tax owed

Most recent: October 2024 amnesty program

Next likely: Q2-Q3 2026 (they usually run one after major reforms)

Your Action Plan If You Haven’t Been Filing

Option 1: Come Forward Now (Recommended)

Steps:

Get your TIN (if you don’t have one)
Gather income records (bank statements, PayPal reports, whatever you have)
Estimate your income for past years (be honest, err on the side of over-declaring)
Calculate rough expenses (even without receipts, some deductions are allowable)
File back returns (file for each unfiled year)
Request payment plan
Start filing current year correctly

Time investment: 10-20 hours
Likely cost: Less than you fear
Peace of mind: Priceless

Option 2: Wait for Amnesty (Risky)

Pros:

Potentially lower penalties
Official forgiveness

Cons:

No guarantee amnesty will happen
FIRS might find you first
Anxiety continues

Option 3: Start Fresh in 2026 (Not Recommended)

The temptation: “I’ll just start filing from 2026 and hope they don’t look backward.”

Why this is dangerous:

FIRS can audit 6 years back
Starting suddenly after years of non-filing raises flags
If audited, looks worse than voluntary disclosure

Real Example: Bola’s Voluntary Disclosure

Bola, 37, Freelance Photographer, Lagos

Background:

Freelanced for 7 years
Never filed
Made ₦3M-₦6M annually
Read about TIN-bank linking, panicked

What he did:

Got TIN in November 2025
Hired accountant (₦100k one-time)
Reconstructed income from bank statements
Filed 6 years of back returns (FIRS only goes back 6 years)
Total tax owed: ₦2.1M
Penalties assessed: ₦3.2M
Negotiated down to: ₦3.8M total
Payment plan: ₦160k/month for 24 months

Bola’s words: “I was terrified I’d owe ₦20M. Turned out to be ₦3.8M over 2 years. I can handle ₦160k/month. The relief of not carrying that fear anymore? Worth every naira.”

Current status: Fully compliant, sleeps peacefully, business growing (can now bid for corporate contracts that require tax clearance).

Question 5: “Tax is Confusing and I Can’t Afford a ₦200k/Year Accountant”

The Accountant Cost Trap

Here’s what most freelancers discover:

Small accounting firms quote:

Annual tax filing: ₦150,000-₦300,000
Monthly bookkeeping: ₦50,000-₦100,000
Advisory services: ₦100,000-₦500,000
Total: ₦200,000-₦500,000/year

For a freelancer making ₦3M-₦5M annually, that’s 4-10% of your income!

No wonder you can’t afford it.

Why Accountants Are Expensive (And When You Actually Need One)

Why they cost so much:

Professional training (ICAN, ACCA) takes years
Liability if they make mistakes
Time spent understanding your unique situation
Ongoing education on tax law changes

When you actually NEED a full accountant:

Your income exceeds ₦20M/year
You have complex corporate structures
You’re raising investment
You’re being audited
You have international operations across multiple countries

For most freelancers? You don’t need a ₦200k/year accountant.

The DIY Approach (With Help)

What you actually need:

Clear explanations of tax rules (in English, not legal jargon)
Step-by-step filing guidance
Automated calculations (so you don’t make math errors)
Deadline reminders
Expense tracking that doesn’t take hours

Cost of DIY with tools:

Aothr: ₦15,000-₦30,000/year (automation + guidance)
Or: Free tools + 5-10 hours of learning

ROI:

Save ₦170,000-₦485,000/year vs hiring accountant
Learn valuable business skill (you’ll understand your finances better)
Maintain control (you know exactly what’s happening)

The Middle Ground: Tax Consultant (Not Full Accountant)

What they do:

Review your DIY filing before submission
Answer specific questions
Strategic tax planning advice
Available if you get audited

Cost:

₦30,000-₦80,000/year (one or two consultations)
Much more affordable than full accounting services

When to use:

First year filing (want someone to double-check)
Complex situations (multiple income streams, asset sales)
Annual strategic planning

Breaking Down Tax “Confusion”

What makes tax confusing isn’t the math—it’s the language.

Instead of: “Consolidated Relief Allowance shall be computed as the higher of 1% of gross income or ₦200,000 plus 20% of gross income…”

You need: “You get a deduction equal to: 20% of your rent OR ₦500,000, whichever is bigger.”

Same rule. One is incomprehensible. One is clear.

The tax rules themselves aren’t complex for most freelancers:

Add up all your income
Subtract business expenses
Subtract rent relief
Apply tax rates to what’s left
Subtract any WHT already paid
Pay the difference

That’s it.

What’s complex:

Knowing what counts as a business expense
Getting the tax rates right
Understanding WHT credits
Navigating the FIRS portal
Knowing deadlines

Solution: Use tools that handle the complexity for you.

Real Example: Comparing Costs

Ifeanyi, 29, Web Developer, Port Harcourt

Annual income: ₦5,200,000

Option A: Full Accountant

Annual retainer: ₦250,000
Monthly bookkeeping: ₦600,000
Total: ₦850,000/year
16% of income

Option B: DIY with Aothr

Aothr subscription: ₦24,000/year
One tax consultant review: ₦50,000
Total: ₦74,000/year
1.4% of income

Savings: ₦776,000 annually

Ifeanyi’s decision: Went with Option B, used savings to upgrade equipment and take a course.

Result: Filed correctly, passed FIRS review, saved 97% on accounting costs.

Question 6: “I Don’t Have Time to Track Expenses Manually”

The Time Trap

Let’s be honest about time:

Manual expense tracking:

Collect receipt: 30 seconds
Photograph/scan: 30 seconds
Log in spreadsheet: 2 minutes
Categorize: 1 minute
Per expense: 4 minutes

If you have 20 expenses per month:

20 × 4 minutes = 80 minutes/month
16 hours per year just on expenses

Plus:

Income tracking: 3 hours/year
Reconciling records: 5 hours/year
Tax filing: 6 hours/year
Total: 30 hours/year

Your time value: If you charge ₦15,000/hour (₦120k/day), those 30 hours cost you ₦450,000 in lost income.

No wonder you don’t have time.

The Automation Solution

What modern expense tracking does:

Receipt Capture:
- Take photo with phone
- AI reads receipt automatically
- Extracts: vendor, amount, date, category
- Stores in cloud
- Time: 10 seconds
Bank Integration:
- Connects to your bank account
- Automatically imports transactions
- Suggests categories based on vendor
- Time: 0 seconds (automatic)
Smart Categorization:
- AI learns your patterns
- “MTN ₦5,000” → Automatically categorizes as “Phone/Internet”
- “Adobe ₦12,000” → Automatically “Software Subscription”
- Time: 0 seconds (automatic)
Real-Time Reports:
- See profit/loss anytime
- Know year-to-date tax liability
- Projected annual tax
- Time: 0 seconds (always updated)

Total time spent: ~2 hours per year (vs 30 hours manual)

Time saved: 28 hours Value: ₦420,000 (at ₦15k/hour rate)

The “I’m Not Tech-Savvy” Objection

Common concern: “I barely understand Excel. I’m not going to learn complicated accounting software.”

The reality: Modern tools are simpler than Excel.

Aothr example:

Snap photo of receipt → Done
Approve bank transactions → Done
View dashboard → See everything

No accounting knowledge needed. If you can use Instagram, you can use Aothr.

Real Example: Time Reclaimed

Nkechi, 33, Social Media Manager, Lagos

Before automation:

Tracked expenses in notebook
Forgot receipts constantly
Spent entire weekends catching up
Lost ₦180,000 in deductions (couldn’t find receipts)
Tax time: Pure stress

After automation (Aothr):

Takes phone photo → Expense logged
Bank transactions auto-imported
Reviews in 5 minutes weekly
Found ₦400,000 in deductions she was missing
Tax filing: 45 minutes

Time saved annually: 28 hours Money saved: ₦400,000 in recovered deductions Stress saved: Immeasurable

Nkechi: “I resisted technology for so long. I thought it would be complicated. It’s literally easier than the manual system I was using. And I’m making better business decisions because I can see my numbers in real-time.”

The Bottom Line: You Can Do This

If you read this far, you’re already ahead of 95% of Nigerian freelancers.

You now know:

✅ How to file taxes (it’s simpler than you thought)
✅ How to claim WHT back (track certificates, include in filing)
✅ That foreign income is taxable (but with good deductions, it’s manageable)
✅ What happens if you haven’t been filing (scary but survivable)
✅ That you don’t need a ₦200k/year accountant (tools + learning work fine)
✅ How to track expenses without wasting time (automation is your friend)

The anxiety you feel? It comes from uncertainty.

Once you understand the rules, tax becomes just another part of running your business—not something to fear.

Your Next Steps (Do This Week)

Monday: ☐ Get your TIN (15 minutes, www.taxid.firs.gov.ng) ☐ Link TIN to your bank accounts

Tuesday: ☐ Create a simple income tracking system ☐ Log all 2025 income you can remember/find

Wednesday: ☐ Gather 2025 receipts (or bank statements) ☐ Estimate your business expenses

Thursday: ☐ Calculate your rough 2025 tax liability (use the formulas in this article) ☐ Set aside money if you’ll owe tax

Friday: ☐ Decide: DIY with tools, or hire one-time consultant? ☐ If DIY: Sign up for accounting software (Aothr has free trial) ☐ If consultant: Research and contact 2-3 options

Weekend: ☐ Set up your ongoing tracking system ☐ Take a deep breath—you’ve got this!

Still Overwhelmed? We Built Aothr For You

We created Aothr after talking to hundreds of Nigerian freelancers who said exactly what you’re thinking:

“I want to be compliant, but I don’t know how and I don’t have time.”

Aothr answers all 6 questions in this article with automation:

✅ “I don’t know how to file” → Step-by-step guided filing in plain English
✅ “I don’t know how to claim WHT” → Automatic WHT tracking and credit calculation
✅ “Do I pay tax on Upwork/Fiverr?” → International income tracking with currency conversion
✅ “I’m scared of FIRS” → Compliance dashboard shows your exact status
✅ “Can’t afford accountant” → ₦24k/year vs ₦200k+/year accountant
✅ “No time to track expenses” → Snap photo, AI does the rest

Category: tax, Finance