Tax Reforms: Infractions, penalties Nigerian taxpayers should know as new laws take effect 2026

*Effective from January 1, 2025, individuals, businesses, and corporate bodies that fail to remit deducted tax, or self-account must pay the full amount owed, a 10 percent annual administrative penalty, and interest at the Central Bank of Nigeria’s monetary policy rate

Isola Moses | ConsumerConnect

The new Nigerian Tax Acts, expected to come into full effect January 1, 2026, introduce comprehensive reforms aimed at strengthening compliance, improving revenue collection, and modernising the Nigeria’s tax administration.

Therefore, in order to ensure effective enforcement, the Acts have outlined a wide range of offences and corresponding penalties for individuals, businesses, and corporate bodies in the tax ecosystem.

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The new tax legislations have introduced stringent penalties, including a N10 million fine and imprisonment for up to 10 years for physically assaulting a tax officer.

Also, non-compliance by virtual asset service providers attracts a fine of N10 million for the first month of default and N1 million per additional month, along with possible suspension or revocation of their Securities and Exchange Commission (SEC) licence.

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As the implementation of the new Acts becomes effective from January, inducing a tax officer now attracts serious consequences.

These include: individuals face N500, 000 and corporate bodies up to N2 million, alongside potential imprisonment of up to three years and payment of tax due.

Besides, the use of a weapon during a tax offence can lead to imprisonment up to five years, while injuring a tax officer while armed carries up to 10 years.

Under the new laws, failure to register now attracts a penalty of N50,000 in the first month and N25,000 for each additional month.

Those who fail to file VAT returns will face a fine of N100,000 for the first month and N50, 000 thereafter, while companies that do not keep proper books for accounting will be fined N50,000.

On digital transformation of the tax system

In a major push to digitise tax operations, denying access to technology deployment carries a penalty of N1 million on the first day and N10,000 per day thereafter. Businesses that fail to use the fiscalisation system will pay N200,000 plus 100 percent of the tax due, alongside interest based on the Central Bank of Nigeria (CBN) rate.

The Acts also come down hard on tax deduction failures, imposing a penalty equal to 40 percent of the amount not deducted.

Failure to make attribution attracts a penalty of N1 million.

Those who do not remit deducted tax or self-account must pay the full amount owed, a 10 percent annual administrative penalty, and interest at the CBN monetary policy rate.

In more serious cases, offenders risk imprisonment of up to three years, fines not less than the principal tax due, plus up to 50 percent penalty, or both.

Taxpayers who ignore official demands, notices, or requests will pay N100,000 for the first day and N10,000 daily thereafter.

Failure to provide the required documents or records attracts N200,000 initially and N10,000 for following days. Non-compliance with legal circulars brings a penalty of N1 million for the first day and N10,000 for every additional day.

Stamp duty offences Failure to stamp the required instruments attracts a penalty of 10 percent of the unpaid duty plus interest, while failure to disclose facts in dutiable instruments carries a penalty of N100,000 or N50,000, or imprisonment up to three years.

Not notifying a change of address comes with a penalty of N100,000 in the first month and N5,000 subsequently.

Fraud is a serious offence. Fraud related to stamps carries an imprisonment of up to three years, a fine of at least N2 million or both.

Offences involving authorised or unauthorised persons attract fines equal to 200 percent of the amount involved or imprisonment up to three years. Impersonating a tax officer now attracts up to N1 million in fines or imprisonment up to three years.

Aiding and abetting tax offences carries the same penalty.

Obstructing tax authorities leads to an administrative charge of N1 million and, upon conviction, an additional fine of up to N1 million or imprisonment, among others.

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