The new Nigerian Tax Act, which comes into effect on January 1, 2026, has been hailed as containing reforms capable of transforming the nation’s economy, promoting equity among the populace, improving the financial capabilities of low and medium class workers, while substantially bridging Nigeria’s age-long infrastructural gap.
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To enforce compliance and effective implementation, some guidelines, including penalties for flouting the laws, have been put in place. Some of the penalties have been outlined below.
Failure to register
N50,000 for the first month of default and N25,000 for each subsequent month.
Failure to file returns (VAT returns)
N100,000 in the first month in which the failure occurs and N50,000 for each subsequent month.
Failure to keep books
For a company, N50,000.
Failure to grant access for the deployment of technology
N1,000,000 for the first day of default and N10,000 for each subsequent day of default.
Failure to use fiscalisation system
N200,000 plus 100% of tax due and interest at the prevailing CBN rate per annum.
Failure to deduct tax
40% of the amount not deducted.
Failure to make attribution
N100,000 penalty.
Failure to remit tax deducted at source or self-account
For failure to remit tax deducted: the person is to pay the amount deducted, collected or withheld but not remitted, an administrative penalty of 10% per annum, and interest at the prevailing CBN monetary policy rate.
For self-account: the person is liable to pay the tax not self-accounted for, an administrative penalty of 10% per annum of the amount not self-accounted for, and interest at the prevailing CBN monetary policy rate.
A person convicted of any of the offences under this section shall be liable to imprisonment up to three years or a fine of not less than the principal amount due plus penalty of not more than 50% of the sum or both.
Failure to attend to demands, requests or notices
N100,000 on the first day of default and N10,000 for every subsequent day the default continues.
Anyone who does not provide requested tax information, documents or records within the required time will pay an administrative penalty of N200,000 for the first day of default and N10,000 for each subsequent day the failure continues.
A person who fails or refuses to comply with obligations to submit information relating to legal arrangements, notices, rules, regulations, guidelines or circulars issued by the Service or any other relevant tax authority is liable to an administrative penalty of N1,000,000 for the first day of default, in addition to N10,000 for each subsequent day of failure. Other administrative penalties may apply as stated in any related notice, rule, regulation, guideline or circular.
Penalty for non-compliance by VASP
N10,000,000 in the first month of default, plus N1,000,000 for every subsequent month that the default continues, or suspension or revocation of operating licence by the SEC.
Failure to stamp
A person who fails to comply with the relevant provisions of the Nigerian Tax Act, 2025, is liable to pay 10% of the unpaid duty and interest at the prevailing CBN monetary policy rate.
Failure to disclose facts in a dutiable instrument
N100,000 or, on conviction, a fine of N50,000 or imprisonment not exceeding three years or both.
Failure to notify change of address
N100,000 for the first month of default and N5,000 for each subsequent month the failure continues.
Fraud relating to stamps
On conviction, imprisonment for a term not exceeding three years or a fine of at least N2,000,000 or both.
Offence by authorised and unauthorised persons
Liable on conviction to a fine equivalent to 200% of the sum in question or imprisonment for a term not exceeding three years or both.
Inducement of an authorised officer
For an individual, a penalty of N500,000; for a body corporate, N2,000,000 or imprisonment for a term not exceeding three years or both, in addition to paying the tax due.
Use of weapon
Carrying an offensive weapon while committing an offence under this Act can lead to imprisonment for a term not exceeding five years.
Anyone who injures a tax officer while armed with a weapon during a tax-related duty faces up to 10 years in prison if convicted.
Impersonation of an authorised officer
Liable on conviction to a fine not exceeding N1,000,000 or imprisonment for a term not exceeding three years or both.
Aiding and abetting commission of offence
N1,000,000 or imprisonment for a term not exceeding three years or both.
Obstruction
A person who obstructs, hinders, molests or assaults an authorised officer, impedes searches or seizure, damages items liable to seizure, prevents the procuring of evidence or prevents/rescues an arrested person is liable to an administrative penalty of N1,000,000 and, upon conviction, a fine not exceeding N1,000,000 or imprisonment.
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