Nigeria’s new Tax Act, scheduled to take effect on January 1, 2026, has been described by those with inside knowledge as a major reform capable of reshaping the country’s fiscal landscape.
The legislation is expected to broaden equity, strengthen the earning power of low- and middle-income workers, and help address Nigeria’s persistent infrastructure deficit.
To ensure strict compliance, the Act outlines a comprehensive set of penalties for individuals, companies, and organisations that fail to meet tax obligations. Below is a breakdown of key offences and the sanctions attached to them.
Failure to Register
• N50,000 for the first month of default
• N25,000 for every additional month
Failure to File VAT Returns
• N100,000 in the first month of default
• N50,000 for every subsequent month
Failure to Keep Proper Books of Account
• Individuals: N100,000 in the first month, and N50,000 for subsequent months
• Companies: N50,000
Failure to Grant Access for Technology Deployment
• N1,000,000 for the first day of default
• N10,000 for each additional day
Failure to Use Fiscalisation Systems
• N200,000 plus 100% of the tax due
• Interest at the prevailing Central Bank of Nigeria (CBN) rate
Failure to Deduct Tax
• Penalty of 40% of the amount not deducted
Failure to Make Attribution
• N100,000
Failure to Remit Tax Deducted or Self-Accounted
• Mandatory payment of the unremitted amount
• Administrative penalty of 10% per annum
• Interest at the prevailing CBN monetary policy rate
• Possible imprisonment up to three years, or a fine of not less than the principal tax due plus up to 50% penalty, or both
Failure to Comply with Tax Demands, Requests, or Notices
• N100,000 for the first day of default
• N10,000 for each following day
Failure to Provide Required Tax Information or Records
• N200,000 for the first day
• N10,000 for each additional day of default
Failure to Stamp Dutiable Instruments
• 10% of unpaid duty plus interest at the CBN policy rate
Failure to Disclose Relevant Facts in a Dutiable Instrument
• Administrative penalty of N100,000
• Upon conviction: fine of N50,000 or imprisonment up to three years, or both
Failure to Notify Change of Address
• N100,000 for the first month
• N5,000 for each subsequent month
Stamp-Related Fraud
• Imprisonment up to three years or a minimum fine of N2,000,000, or both
Offences by Authorised or Unauthorised Persons
• Fine equal to 200% of the amount involved or imprisonment up to three years, or both
Inducement of a Tax Officer
• Individuals: N500,000
• Corporate bodies: N2,000,000
• Possible imprisonment up to three years, in addition to paying the tax owed
Use of Offensive Weapons During a Tax Offence
• Up to five years in prison
• If injury is caused to a tax officer while armed: up to 10 years in prison
Impersonation of a Tax Officer
• Fine up to N1,000,000
• Or imprisonment up to three years, or both
The Federal Government says strict enforcement of these penalties will ensure greater compliance, improve revenue generation, and enhance public confidence in Nigeria’s tax system ahead of its full rollout in 2026.
