Starting January 1, 2026, Nigeria’s new tax law will introduce tougher penalties for individuals and businesses that fail to comply with tax rules. The Nigerian Tax Act 2026, signed by President Bola Tinubu on June 26, 2025, is aimed at improving tax compliance, strengthening revenue collection, and modernising the country’s tax system.....TAP TO CONTINUE READING

The law sets out clear offences and punishments, with fines that can rise to N10 million and prison terms of up to 10 years for serious violations, including attacks on tax officers. The overall intention is to tighten enforcement across the country and reduce evasion and fraud.

Below is a simplified breakdown of major offences and penalties under the new law.
1. Failure to register and file returns

Failure to register: N50,000 for the first month, then N25,000 for each additional month.
Failure to file VAT returns: N100,000 for the first month, then N50,000 for each additional month.
Failure to keep proper books (companies): N50,000

2. Technology and fiscalisation compliance

Denying tax authorities access for technology deployment: N1,000,000 on the first day, then N10,000 daily after that.
Failure to use the fiscalisation system: N200,000 plus 100% of the tax due, with interest calculated at the prevailing CBN rate.

3. Failure to deduct and remit taxes

Failure to deduct tax: penalty of 40% of the amount not deducted.
Failure to remit deducted tax or self-account: full amount owed, plus a 10% annual administrative penalty, plus interest at the CBN monetary policy rate.
Serious cases: possible imprisonment up to three years, fines not less than the principal tax due, plus up to 50% additional penalty, or both.

4. Ignoring official notices or requests

Failure to respond to demands, notices, or provide records: N100,000 for the first day, then N10,000 per day.
Non-compliance with circulars or regulations: N1,000,000 for the first day, then N10,000 daily after that.

5. Stamp duty offences

Failure to stamp instruments: 10% of unpaid duty plus interest.
Failure to disclose facts in dutiable instruments: N100,000 or N50,000, or imprisonment up to three years.
Failure to notify change of address: N100,000 for the first month, then N5,000 for each subsequent month.

6. Fraud, impersonation, obstruction, and assault

Stamp-related fraud: imprisonment up to three years, fine of at least N2,000,000, or both.
Offences by authorised or unauthorised persons: fine of 200% of the sum involved or imprisonment up to three years, or both.
Impersonating a tax officer or aiding offences: fines up to N1,000,000 or imprisonment up to three years, or both.
Obstructing tax officers: N1,000,000 administrative penalty and possible further punishment upon conviction.
Using weapons during a tax offence: imprisonment up to five years.
Injuring a tax officer while armed: imprisonment up to 10 years.
Inducing a tax officer: N500,000 for individuals, N2,000,000 for companies, possible imprisonment up to three years, plus payment of taxes due.

7. Virtual Asset Service Providers (VASP)

Non-compliance: N10,000,000 for the first month, then N1,000,000 for each subsequent month, or possible suspension or revocation of SEC licence.