Offences and Penalties in the New Nigerian Tax Act

The new Nigerian Tax Act, scheduled to take effect on January 1, 2026, introduces far-reaching reforms aimed at strengthening the economy, promoting equity, and improving the financial stability of low- and middle-income earners while bridging infrastructural gaps across the country.

To ensure compliance and smooth implementation, the Act outlines specific offences and corresponding penalties for individuals and businesses, beginning with sanctions for failure to register with the tax authorities, which now attracts N50,000 for the first month and N25,000 for each subsequent month of default.

Failure to file VAT returns draws a penalty of N100,000 in the first month and N50,000 for each additional month, while companies that fail to keep proper books of account face a fine of N50,000. Those who refuse access for the deployment of tax technology risk a penalty of N1,000,000 for the first day and N10,000 for every subsequent day.

The Act further stipulates that failure to use the required fiscalisation system attracts N200,000 plus 100% of the tax due and interest at the prevailing Central Bank of Nigeria rate. Likewise, failure to deduct tax incurs a penalty amounting to 40% of the sum not deducted.

Taxpayers who fail to make proper attribution are liable to a penalty of N100,000, while failure to remit deducted tax or self-accounted tax attracts payment of the outstanding sum, a 10% administrative penalty per annum, and interest at the prevailing monetary policy rate.

“Where a person refuses or neglects to remit tax deducted, collected, or withheld, such an individual is liable to pay the full amount in addition to administrative penalties and interest as prescribed under the law,” the Act provides.

“A person convicted under these provisions may face imprisonment for up to three years or a fine not less than the principal amount due, plus a penalty not exceeding 50% of the total sum or both depending on the severity of the violation,” it further states.

Additionally, individuals who fail to comply with requests, notices, or demands from tax authorities face penalties beginning at N100,000 for the first day and N10,000 for each subsequent day, while refusal to submit required information or documents attracts an administrative penalty of N1,000,000 on the first day and N10,000 for each additional day, with further sanctions applicable under related regulations.