Nigerians risk losses, filling errors as unregistered tax advisors rise

… weak verification system, low awareness fuelling rise in fake consultants

Nigeria’s push to expand tax compliance under new reforms is being undermined by the activities of unregistered tax consultants, with experts warning that unsuspecting taxpayers face risks ranging from misfiled returns to financial loss.

Thousands of Nigerian taxpayers may lose money to unregistered tax consultants who misfile returns, collect illegal fees, or disappear after receiving payments, highlighting weak enforcement and growing risks in the country’s tax compliance system.

The trend is becoming more pronounced as Nigeria implements its 2025 tax reforms, which aim to expand the tax base and improve compliance but have also created an information gap now being exploited by fraudsters.

Read also: Nigerians misunderstand tax rules, risk costly compliance mistakes daily

For many taxpayers, the consequences are immediate and costly.

Sandra Nkem, a legal practitioner and tax consultant, recounted how one of her clients was nearly trapped by a fraudulent tax handler after deciding to use an internal staff member instead of a verified professional.

“A client of mine had a similar issue,” she said. “Every detail that was sent turned out to be a scam, and it later accumulated a whole lot of problems for my client, including default fees and unnecessary stress.”

According to her, confusion surrounding Nigeria’s evolving tax laws is making many Nigerians vulnerable to exploitation.
“Many people are still confused,” Nkem said. “The agencies have not really done full groundwork in terms of public understanding. People need to know the right thing to do and the right people to speak with; otherwise, it will continue to create issues.”

That confusion is increasingly creating opportunities for fraudsters posing as tax consultants or agents, particularly online.
A small business owner in Lagos said she was asked to pay N5,000 by an online contact who claimed to process Tax Identification Numbers (TINs), only for her to later discover that the process could be completed through official channels at little or no cost.

The growing confusion has also triggered warnings on social media from Nigerians who say they narrowly escaped tax-related scams.
Public affairs commentator Somto Okonkwo also shared a viral video on X showing a man recounting how suspected fraudsters attempted to scam him under the guise of offering tax-related assistance and securing his bank account.
“They nearly entered their trap,” the man said. “Anybody who calls you and starts offering unsolicited assistance, especially about taxes or your ATM, you need to be careful.”

In the video, the speaker explained that the callers attempted to gain his trust by claiming they could help him “block” suspicious deductions linked to tax compliance requirements, a tactic he warned could easily deceive less informed Nigerians.

Stories like these are increasingly common, particularly among freelancers, small business owners, and first-time taxpayers navigating new compliance requirements.

Industry experts say the rise of fake tax consultants is driven by a mix of low awareness, weak verification systems, and the growing complexity of tax processes.

Speaking at a Taraba State Internal Revenue Service (TIRS) conference, Idi Ivo, the state’s executive director and board member TIRS, stressed that professionalising tax practice is critical to addressing the problem.

He explained further that introducing proper accreditation would help eliminate quackery, reduce compliance errors, and improve the integrity of Nigeria’s tax system.

Nigeria’s legal framework already provides a structure for regulating tax practitioners, but enforcement remains uneven.

According to Samuel Oyenitun, managing senior associate at SimmonsCoopers Partners, and Rosecarmel Odeh, an associate at the same firm, in their analysis of the Nigeria Tax Administration Act (NTAA) 2025, argued that only individuals certified by recognised professional bodies are legally allowed to act as tax agents.

The law defines a tax agent as any person “acknowledged and duly certified by a professional body in Nigeria to represent a taxable person.”

In practice, this includes members of bodies such as the Chartered Institute of Taxation of Nigeria and the Institute of Chartered Accountants of Nigeria.

However, the Act goes further by introducing a two-step safeguard: certification by a professional body confirms technical competence, while accreditation by tax authorities grants legal authority to represent taxpayers.

This dual requirement is designed to ensure that only qualified and officially recognised professionals act as intermediaries between taxpayers and government agencies.

Read also: Banks to pass rising tax compliance costs to customers

Despite this framework, the scale of unregulated activity remains significant.

As of 2018, the Chartered Institute of Taxation of Nigeria had certified over 21,000 professionals, while the Institute of Chartered Accountants of Nigeria had more than 63,000 members, figures that industry insiders say are small relative to Nigeria’s large and largely informal taxpayer base.

This gap has created room for unqualified operators.

Recent investigations show that fraudsters are exploiting confusion around the new tax laws to target unsuspecting Nigerians.

According to an expert, scammers are not inventing new tactics but “simply following confusion.”

His report identifies several common schemes, including fake tax agents operating on WhatsApp and Instagram, phishing websites impersonating official tax portals, and fraudulent requests for sensitive data such as BVN and NIN.

In many cases, victims are asked to pay “processing fees” ranging from N5,000 to N50,000. Some scammers disappear after receiving payments, while others use stolen information to file fictitious returns, exposing taxpayers to future audits and penalties.

Read also: Abaribe tasks CITN to demand accountability of tax payments

Public awareness remains low, further compounding the problem.

In a LinkedIn post, Emeka Ekwonwa, a tax enthusiast, warned against rushing tax payments or responding to unsolicited messages.

“Government agencies do not send unsolicited SMS or WhatsApp messages requesting immediate tax payments,” he said. “Taxpayers should always confirm any tax-related information through official government websites or tax offices.”

Beyond individual losses, analysts warn that the rise of fake tax consultants poses broader economic risks.

Poor filings, fraudulent claims, and taxpayer distrust can reduce overall compliance rates, undermining government efforts to increase revenue and improve Nigeria’s tax-to-GDP ratio.

International evidence suggests that properly regulated tax agents significantly improve outcomes.

Studies from countries such as Uganda, South Africa, and Kenya show that accredited practitioners help taxpayers file more accurate returns, reduce disputes, and improve accountability within the system.

The Nigerian framework under the NTAA adopts a similar approach, aiming to professionalise tax advisory services while protecting taxpayers from errors and fraud.

Tax experts say enforcement and public education will determine its success.

They recommend stronger verification systems, wider awareness campaigns, and stricter penalties for unlicensed operators.

For taxpayers, due diligence is becoming increasingly essential.

Experts advise verifying the credentials of any tax consultant, ensuring they are registered with recognised professional bodies, and confirming filings through official tax authority channels.

As Nigeria’s tax system evolves, the gap between policy and practice is becoming more visible, one that fraudsters are quick to exploit but which regulators now face increasing pressure to close.