Key Changes Under New Tax Regime As FG Unveils Timelines, Penalties for Nigerians
- The Nigeria ta law has set clear deadlines for payment of Stamp Duty, PAYE, VAT and filings
- There is also penalties set for no compliance by taxable individuals rising to up to 40% plus
- Tax experts warn businesses and individuals to ensure compliance to avoid accumulating penalties
Legit.ng journalist Dave Ibemere has over a decade of experience in business journalism, with in-depth knowledge of the Nigerian economy, stocks, and general market trends.
The Nigeria Tax Act (NTA) 2025 which fully kicked off in January 2026 has introduced several changes to the country’s tax compliance framework and has set a clearer filing timelines, payment obligations and stiffer penalties for non-compliance.
The federal government says the reforms are aimed at improving revenue certainty, reducing ambiguity and strengthening enforcement across major tax heads, including Stamp Duty, Personal Income Tax (PIT), Value Added Tax (VAT) and Withholding Tax (WHT).
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Key changes under the new tax law
Under the Act, Stamp Duty provisions are now consolidated in Sections 124–127 of the NTA 2025, replacing the Stamp Duties Act, Cap S8 LFN 2004.
All dutiable instruments executed in, or relating to, Nigeria must be stamped within 30 days of execution by the transferee or beneficiary, at the applicable rate.
Non-compliance attracts the unpaid duty, a 10% penalty and interest calculated at the Monetary Policy Rate (MPR).
Tribune reports that tax experts say the fixed 30-day deadline removes long-standing uncertainties around timing and enforcement.
Personal income tax changes
For personal income tax, employers are required to deduct Pay-As-You-Earn (PAYE) tax from employees’ salaries at progressive rates of between 0 and 25%, with annual income of up to N800,000 exempt. Monthly PAYE remittances must be made by the 10th day of the month following deduction.
Specifically, deductions for December 2025 are due on January 10, 2026, while those for January and February 2026 are due on February 10 and March 10 respectively.
Late remittance attracts a 10% penalty plus interest at the MPR, while failure to deduct carries a 40 per cent administrative penalty on the amount not deducted.
Also, Employers must also file annual PAYE returns by January 31 each year, with penalties of ₦100,000 in the first month of default and N50,000 for each subsequent month.
Individuals, including those in paid employment, are required to file annual personal income tax returns covering income from all sources.
While the NTA 2025 does not specify a filing deadline for individuals but tax professionals expect March 31 as the deadline.
Penalties for failure to file remain N100,000 in the first month and N50,000 for each additional month.
Source: Facebook
Value added tax changes
Value Added Tax remains at 7.5% on taxable supplies, with zero-rating extended to essential items such as food, medical products, educational materials and exports, excluding crude oil and gas.
VAT returns and payments must be filed with the Nigeria Revenue Service (NRS) on or before the 21st day of the month following the transaction.
For December 2025, returns are due on January 21, 2026.
Late filing or inaccurate returns attract penalties of N100,000 in the first month and N50,000 for each subsequent month, while late payment draws a 10 per cent penalty plus interest.
Withholding Tax
The Act also tightens rules on Withholding Tax, which must be deducted at source on qualifying transactions such as dividends, interest, rents, royalties, contracts and directors’ fees, at rates ranging from 2 to 20%
Companies are required to remit WHT to the NRS by the 21st day of the following month, while individuals and unincorporated entities must remit to State Internal Revenue Services by the 30th day.
Failure to deduct attracts a 40% administrative penalty, while late remittance incurs a 10% penalty plus interest.
Simple, legal bank transfer narrations to avoid paying tax
Earlier, Legit.ng reported that Nigerians may need to pay closer attention to the details of their bank transfer narrations as the federal government gears up to implement a new tax regime starting January 2026.
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Tax Reforms: Nigerian workers report higher take-home pay in January 2026 under PAYE system
The government has indicated that the reform will leverage digital banking data to enhance tax compliance, making the accuracy of transaction descriptions increasingly important.
Source: Legit.ng
