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.
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 is to pay the amount deducted, collected or withheld but not remitted. And administrative penalty of 10% per annum, and the interest at the prevailing CBN monetary policy rate.
For self-account under this act is liable to pay the tax not self accounted for, an administrative penalty of 10% per annum of the amount not self accounted for, an interest at the prevailing CBN monetary policy rate.
A person convicted of any of the offenses 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, request or notices
N100,000 in the first day of default and N10,000 for every subsequent day where the default continues.
Any one 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 where the failure continues.
A person who fails to or refuses to comply with obligations to submit information relating to legal arrangement, notice, rules, regulations, guidelines or circulars issued by the services 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 10,000 for each subsequent day of failure, other administrative penalties may apply as stated in any related notice, rule, regulation, guideline or circular.
