The Federal Government has tightened Nigeria’s tax enforcement framework, introducing stiff penalties for companies and individuals who fail to comply with tax registration and filing requirements under the Nigeria Tax Administration Act (NTAA).
Under the new law, companies and statutory bodies that award contracts to unregistered individuals or businesses risk an administrative fine of ₦5 million, while individuals who refuse to register for tax will face escalating monthly penalties.
₦5 Million Penalty for Awarding Contracts to Unregistered Persons
According to the NTAA, any company or statutory body that awards a contract to an unregistered taxpayer will be fined ₦5,000,000. This provision is aimed at closing loopholes that allow informal and non-compliant businesses to benefit from government or corporate contracts without fulfilling tax obligations.
The move signals the government’s intent to ensure that only tax-compliant individuals and businesses participate in formal economic activities.
Tax Registration Is Now Mandatory, or Pay the Price
The Act also makes it clear that failure or refusal to register for tax comes at a cost. Any taxable person who defaults will be required to pay:
• ₦50,000 in the first month of default
• ₦25,000 for every additional month the failure continues
This applies to individuals, freelancers, and businesses operating within Nigeria’s tax net.
Heavy Fines for Failure to File or Submitting False Returns
The NTAA imposes further penalties on taxpayers who fail to file returns or knowingly submit incomplete or inaccurate information. Offenders will pay:
• ₦100,000 in the first month of default
• ₦50,000 for each additional month the failure persists
This provision targets deliberate tax evasion and encourages timely, accurate reporting.
₦1 Million Fine for Blocking Tax Authority Technology
The law also empowers tax authorities to deploy technology for tax administration. Any person who refuses to grant access after 30 days’ notice will be fined ₦1 million on the first day of default, with an additional ₦10,000 for each day the refusal continues.
Fiscalisation Violations Attract Major Penalties
Taxable persons who fail to process taxable supplies through the approved fiscalisation system will face:
• ₦200,000 administrative penalty
• 100% of the tax due
• Interest calculated at the prevailing Central Bank of Nigeria (CBN) Monetary Policy Rate per annum
Failure to Deduct or Withhold Tax Comes at a Cost
Any person or organisation required to collect, deduct, or withhold tax but fails to do so will be fined 40% of the amount not deducted, reinforcing accountability in tax collection.
Additionally, failure to make required tax attribution or notify the tax authority after doing so attracts a ₦1 million penalty.
Jail Time Possible for Serious Offences
Beyond financial penalties, the NTAA introduces criminal consequences. Anyone convicted of an offence under the Act may face up to three years in prison, or a fine of not less than the principal tax amount owed plus a penalty of up to 50%, or both.
What This Means for Nigerians
The message from the government is clear: tax compliance is no longer optional. Whether you are an individual, freelancer, contractor, or corporate body, registering for tax, filing accurate returns, and ensuring compliance is now critical to avoiding heavy fines or legal trouble.
As Nigeria pushes to widen its tax base and strengthen revenue collection, taxpayers are advised to regularise their status early and seek professional guidance where necessary.
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