Full list: Massive Penalties Await Nigerians, Companies Who Try to Avoid Tax Payment in 2025
- Nigeria’s new tax law has now taken effect, introducing strict penalties for individuals and companies
- The 2026 Tax Administration Act targets non-registration, failure to file returns, tax evasion, and obstruction of tax officers
- Penalties range from fines of N10,000 to N10 million, imprisonment of up to 10 years, or both, depending on the offence
Legit.ng journalist Dave Ibemere has over a decade of business journalism experience with in-depth knowledge of the Nigerian economy, stocks, and general market trends.
The new tax law prescribes extensive penalties targeting individuals and companies that attempt to avoid paying tax.
Under the Nigeria Tax Administration Act, a taxable person who fails or refuses to register for tax is liable to a penalty of N50,000 for the first month of default and N25,000 for each subsequent month the failure continues
Source: Twitter
Also, those who fail to file returns, or knowingly submit incomplete or inaccurate returns, face N100,000 for the first month and N50,000 for each subsequent month of non-compliance.
Here are other penalties and offences
Also, the new law said companies and statutory bodies that award contracts to unregistered persons face a fine of N5 million.
Other administrative penalties cover a wide range of offences.
Taxpayers who fail to maintain proper books and records may be fined N10,000 for individuals and N50,000 for companies.
Individuals or organisations refusing access to tax authorities for technology deployment after 30 days of notice are liable to N1 million for the first day and N10,000 for each additional day of default.
The law also targets fiscal compliance failures.
Taxpayers who fail to process taxable supplies through the fiscalisation system are liable to N200,000 plus 100% of the tax due, alongside interest at the prevailing Central Bank of Nigeria Monetary Policy Rate.
Those obligated to collect, deduct, or withhold tax but fail to do so face penalties of 40% of the amount not deducted. Individuals who fail to make or notify tax attributions are liable to a N1 million fine.
Non-compliance with notices, rules, or circulars may result in daily fines ranging from N100,000 to N1 million. Virtual Asset Service Providers that default can face up to N10 million in penalties or suspension of licenses.
Source: Getty Images
Criminal sanctions for offences
The Act further imposes criminal sanctions for offences including fraud, false declarations, counterfeiting of tax documents, obstruction of officers, and misuse of tax powers.
Penalties for these offences range from fines of up to N2 million to imprisonment of up to 10 years, or both, depending on the severity.
Directors, officers, partners, trustees, or managers of corporate entities may be held liable for offences committed by the organisation unless proven to have occurred without their knowledge or consent.
Categories of persons that must pay tax in Nigeria
Earlier, Legit.ng reported that the federal government said the law provides clearer guidance on who is legally required to pay tax and how obligations apply to individuals, businesses, and asset owners.
Taiwo Oyedele, chairman of the presidential committee on fiscal policy and tax reforms, said that the changes are also intended to correct widespread misconceptions that taxation applies only to large corporations or wealthy Nigerians.
He noted that under Nigeria’s tax system, obligations are largely determined by income generation and profit, rather than social status or size of business.
Source: Legit.ng
