The Federal Government has rolled out tougher penalties for tax default with the enactment of the Nigeria Tax Administration Act, 2025, signalling a more aggressive push to curb revenue losses and strengthen compliance across the tax system.
Provisions of the Act, particularly those contained in Chapter Four on offences and penalties, introduce a regime of graduated sanctions for individuals and organisations that fail to meet their tax obligations.
Under Section 100 of the law, taxable persons who do not register for tax will be fined ₦50,000 for the first month of default, with an additional ₦25,000 imposed for every subsequent month the failure persists.
The Act also targets public-sector contracting practices. Any statutory body or company that awards contracts to unregistered persons will now be liable to a ₦5 million penalty, a measure designed to block tax-evading operators from benefiting from government contracts.
Sanctions extend beyond registration failures. Section 101 provides that taxpayers who fail to file returns, or who deliberately submit incomplete or inaccurate information, will be fined ₦100,000 in the first month and ₦50,000 for each additional month of non-compliance.
The law further requires taxpayers to maintain proper accounting records. Under Section 102, individuals who fail to keep or present books and records when requested will pay a ₦10,000 fine, while companies will be liable to ₦50,000.
At the same time, the reforms introduce relief measures for low- and middle-income earners. From January next year, individuals earning ₦100,000 or less per month will be exempted from personal income tax. Workers earning between ₦100,000 and about ₦2 million monthly are also expected to pay less tax under the new structure, increasing their take-home pay without any salary adjustment.
The Act also embraces technology-based enforcement. Section 103 stipulates that denying tax authorities access or failing to deploy approved tax technology within 30 days of notice will attract a ₦1 million penalty on the first day, followed by ₦10,000 for each additional day of default.
In addition, businesses that fail to process taxable transactions through the approved fiscalisation system will be fined ₦200,000, in addition to paying the full tax due, plus interest at the prevailing Central Bank of Nigeria monetary policy rate.
Stricter measures are also outlined for withholding tax breaches. Section 105 imposes a 40 per cent penalty on taxes not deducted or withheld, while failure to remit deducted taxes will attract the principal sum, a 10 per cent annual penalty and interest. Serious violations may lead to prison terms of up to three years or fines exceeding the tax owed.
Analysts say the new legislation underscores the government’s resolve to expand non-oil revenue, enforce tax discipline and bring Nigeria’s tax administration closer to international standards at a time of mounting fiscal pressure.
