New Tax Act: Penalties for Non-Compliance

Nigeria’s new Tax Act, effective January 1, 2026, introduces significant penalties for individuals and companies failing to meet tax obligations. The Act aims to improve tax compliance, transparency, and revenue generation.

Key offences and penalties include failure to register, with a ₦50,000 fine for the first month and ₦25,000 for each subsequent month. Failure to file returns attracts a ₦100,000 fine for the first month, with an additional ₦50,000 for each subsequent month.

The Act also outlines penalties for failure to remit tax, including a 10% penalty per annum and interest at the Central Bank of Nigeria monetary policy rate. Fraud and false declarations can result in fines ranging from ₦1 million to ₦2 million and imprisonment up to 5 years.

Taxpayers, including Virtual Asset Service Providers (VASPs), are advised to familiarize themselves with the new regulations to avoid penalties. VASPs face a ₦10 million fine for the first month and ₦1 million for each subsequent month for non-compliance.