A new report launched in Abuja reveals that poor understanding of tax laws is undermining the operations of non-profit organisations in Nigeria. The Compliance or Constriction? report by IdeaPlus Foundation, presented by co-founder Dayo Olaide, identifies widespread gaps in knowledge regarding withholding tax, Value Added Tax (VAT), and stamp duties among civil society organisations. Several non-profits have faced tax audits and received large tax demands, raising concerns about their ability to meet statutory obligations. The study examines whether non-compliance stems from deliberate tax avoidance or weak institutional capacity to handle tax requirements.
Dayo Olaide urged non-profits to strengthen internal systems for tracking tax obligations and called on the Nigeria Revenue Service (NRS) to provide clearer guidance and capacity-building support. Donors were also encouraged to fund tax research and advocacy. Chartered accountant Oladimeji Ayoola stressed the importance of proper documentation and record keeping, describing taxation as the practical application of tax laws in accounting. He advocated for sustained public sensitisation by NRS to improve compliance. Dr Titilayo Enitanfowokan of the Chartered Institute of Taxation of Nigeria said tax obligations should be factored into donor-funded project budgets to prevent unexpected liabilities. She recommended that organisations seek tax advisory support and engage government during tax law reviews.
NRS Chairman Dr Zacch Adedeji, represented by Mrs Bolanle Azeez, stated that recent tax incentives have reduced the burden on NGOs and CSOs. Auwal Rafsanjani of CISLAC welcomed compliance efforts but warned that excessive tax demands could cripple smaller organisations already struggling with funding and staffing. He called for ongoing dialogue between NGOs, the National Assembly, and revenue agencies to address compliance challenges and develop workable solutions.
The report highlights that even well-intentioned non-profits may face severe financial strain due to unclear tax expectations. Without clearer guidance from tax authorities, smaller organisations risk being disproportionately affected by compliance demands.
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