In the last week, I have seen press releases and heard jingles across several media channels by a couple of State Internal Revenue Services announcing that the deadline for submitting employers’ annual PAYE returns has been extended by one to two weeks beyond the statutory deadline of 31 January 2026.
On the surface, these extensions appear well-intentioned, as they give employers more time to file without incurring penalties. But beyond the immediate relief they offer, it makes sense to check whether tax authorities actually have the legal power to extend statutory deadlines at will.
Before addressing this concern, it is helpful to briefly explain what PAYE is and how it fits into the broader tax system. Every individual is required to pay tax on their income, known as personal income tax (PIT).
Where there is an employment relationship, the law requires the employer to deduct PIT from the employee’s earnings, pay the employee net of tax, and remit the tax deducted to the Internal Revenue Service of the state where the employee resides.
This deduction and remittance typically take place on a monthly basis. Tax deducted in this way is referred to as PAYE (Pay As You Earn) because the tax is paid as the income is earned. Individuals who are not in employment, on the other hand, are generally required to self-account for their PIT and remit it directly to the Internal Revenue Service of their state of residence.
After the end of each year, employers are required to submit a return, in a prescribed format, detailing the PAYE tax deducted from their employees during the year.
For example, PAYE deducted in 2025 must be consolidated and filed by employers no later than 31 January 2026. Ideally, filing this return should not be a demanding exercise, which explains why the deadline falls relatively early in the year. In reality, however, employers may face practical challenges, and this likely explains why some state internal revenue services have chosen to offer deadline extensions.
Good intentions are commendable, including giving taxpayers more time to comply. However, problems arise when actions are taken without legal authority. To illustrate why authority matters, releasing a prisoner who has demonstrated good behaviour may appear compassionate. But if the person authorising the release lacks the legal power to do so, the act becomes problematic.
Worse still, it sets a precedent that could later be abused. This is why laws are usually clear about who has the authority to do what. In tax matters, tax authorities are administrators of the law, not lawmakers. Their role is to apply and enforce the law as enacted, not to change its statutory provisions. In the case of annual PAYE returns, the filing deadline of 31 January is fixed by statute.
The law does not empower tax authorities to change this date simply because compliance may be challenging. That said, the law is not rigid or insensitive. It recognises that strict enforcement can sometimes produce unfair outcomes and therefore provides lawful flexibility. For example, the Nigeria Tax Administration Act fixes the PAYE filing deadline in the statute itself, but the same law separately allows penalties to be waived on a case-by-case basis where a taxpayer has shown good cause.
This approach achieves a similar practical outcome to extending deadlines, but crucially, it does so within the limits of the law. Because waivers are granted individually and are subject to oversight, they encourage diligence and reduce the risk of abuse. There may also be exceptional circumstances where case-by-case waivers are insufficient. During events such as a pandemic, where a large number of taxpayers are genuinely unable to meet statutory deadlines for reasons beyond their control, the proper solution is emergency legislation.
This was the approach adopted in many countries during the COVID-19 lockdowns, where deadlines were formally moved or penalties temporarily suspended through legislative processes. The broader point is that deadlines only work when people believe they are real.
When deadlines are changed frequently or informally, they lose their credibility. Compliance begins to feel negotiable rather than obligatory, and over time, this weakens the tax system itself. While recent PAYE deadline extensions may be well-intentioned, they nonetheless amount to actions taken outside the statutory powers granted to tax authorities.
That is a governance concern. Today, the intention may be benign; tomorrow, it may not be. This is precisely why legal limits exist. Some argue that tax authorities possess broad powers under the law to do whatever is necessary to administer and collect taxes. It is true that the law grants administrative discretion to enable effective tax administration.
However, administrative discretion is about applying the law, not rewriting it. It does not permit tax authorities to suspend or alter statutory deadlines. Where changes of general application are required, the law provides a clear and lawful route: regulations.
The Nigerian Tax Administration Act empowers the appropriate authorities to issue regulations, subject to the necessary approvals and publication. Regulations are the proper mechanism for prescribing procedures or filling gaps where the statute permits them. They are not a substitute for changing deadlines that the law itself has fixed.
Tax authorities, much like the police, are law-enforcement bodies. They enforce the law as it is written; they do not make the law. When tax authorities themselves operate strictly within the limits of their legal powers, they lead by example. And when authorities respect the law, taxpayers are far more likely to do the same.
Nojeem ‘Nudge’ Yusuf writes from Cambridge, United Kingdom.
