The newly signed Nigeria Tax Administration Act, 2025, has introduced sweeping reforms aimed at strengthening tax enforcement and penalising individuals and companies that fail to meet their obligations.
Gatekeepers News reports that signed into law by President Bola Tinubu on June 26, the Act is set to come into effect from January 1, 2026, and will be administered by the newly rebranded Nigeria Revenue Service (NRS), currently the Federal Inland Revenue Service (FIRS).
The Act consolidates previously fragmented tax provisions into a unified framework, with strict penalties for a wide range of offences, from failing to register with tax authorities to non-disclosure of operational details such as office addresses. Fines range from ₦10,000 to ₦10 million, with prison terms of up to 10 years for severe infractions.
Under the law, failure to register with tax authorities attracts a ₦50,000 fine in the first month and ₦25,000 for each subsequent month. Companies awarding contracts to unregistered vendors risk a ₦5 million fine. Similarly, late filing of returns draws a ₦100,000 penalty in the first month and ₦50,000 monthly thereafter.
Businesses that fail to maintain proper records or submit them upon request will face penalties of ₦10,000 (individuals) or ₦50,000 (companies).
Moreover, companies that fail to report a change of address within 30 days face fines starting from ₦100,000 in the first month and ₦45,000 for each additional month.
The law also mandates the adoption of fiscalisation technology for tracking transactions. Companies that resist installation of this system will incur a ₦1 million fine on the first day, followed by ₦10,000 daily until compliance.
Non-use of the system also attracts a ₦200,000 fine, along with full payment of tax due and interest at the Central Bank of Nigeria (CBN) monetary policy rate.
The Act takes a hard stance on failure to remit collected taxes. Any person or entity that withholds taxes but fails to remit them by the 21st of the following month is liable to repay the full amount, an additional 10% penalty, and interest based on CBN rates. Convicted offenders could face up to three years in prison, or fines equal to the principal amount plus up to 50% in penalties.
Further offences include non-compliance with tax summons (₦100,000 on the first day and ₦10,000 daily), impersonation of tax officers (₦1 million fine or three years in prison), and submission of false documents, which could result in imprisonment of up to five years.
Virtual Asset Service Providers (VASPs), including cryptocurrency platforms, must comply with the Act or face ₦10 million fines for the first month of default and ₦1 million for each additional month. Non-compliance could also lead to suspension or revocation of their operating licences by the Securities and Exchange Commission (SEC).
The Act extends liability to company executives, trustees, and partners for tax violations committed under their watch — unless they can prove they were unaware of the infractions.
For breaches not explicitly covered in the law, a general penalty of ₦1 million or up to three years in prison, or both, is applicable.
