Jtax Consult

Following the previous article on implications of non complying with Tax Law we have compiled list of key penalties stipulated in

the Nigerian Tax Administration Act 2025.

Below is a non‑exhaustive list of key penalties, with relevant statutory sections.

1. Penalty and Interest for Non‑Payment of Tax

Section 65 – Penalty and Interest for Non‑Payment of Tax

Where a taxpayer fails to pay any tax by the due date:

• The taxpayer is liable to:
  • The outstanding tax, plus
  • Interest at the prevailing Central Bank of Nigeria (CBN) Monetary Policy Rate, and
  • An administrative penalty as prescribed by the Act.

Interest continues to accrue until full payment is made, regardless of disputes or protests. 1

2. Failure to Register for Tax

Section 100 – Failure to Register

Where a taxable person fails to register with the relevant tax authority:

• ₦50,000 for the first month of default
• ₦25,000 for each subsequent month the failure continues

This applies to both individuals and corporate entities. 2

3. Failure to File Tax Returns

Section 101 – Failure to File Returns

Failure to submit required tax returns (including income tax and VAT returns):

• ₦100,000 in the first month of default
• ₦50,000 for each subsequent month

Penalties apply even where no tax is payable, reinforcing filing as a statutory obligation. 2

4. Failure to Deduct or Withhold Tax

Section 105 – Failure to Deduct Tax at Source

Where a person fails to deduct withholding tax when required:

• Penalty of 40% of the tax that should have been deducted

The principal tax remains payable in addition to the penalty. 2

5. Failure to Remit Tax Deducted at Source

Section 106 – Failure to Remit Tax

Where tax is deducted but not remitted:

• Payment of:
  • The full amount deducted, plus
  • Administrative penalty of 10% per annum, and
  • Interest at the prevailing CBN rate

Criminal liability may also arise for willful default. 2

6. Failure to Keep Proper Books and Records

Section 103 – Failure to Keep Books

• ₦10,000 (individuals)
• ₦50,000 (companies)

This penalty applies even where taxes are fully paid but records are inadequate. 2

7. Failure to Grant Access or Provide Information

Sections 59 & 104 – Obstruction and Failure to Provide Information

Where a taxpayer:

• Refuses access to records, premises, or systems, or
• Fails to respond to lawful tax notices

Penalties include:

• ₦1,000,000 for the first day of default
• ₦10,000 for each subsequent day

Additional penalties may apply depending on the nature of the obstruction. 2

8. Failure to Use Mandatory Fiscalisation or Tax Technology

Section 98 – Non‑Compliance with Technology Requirements

Where a taxpayer fails to deploy approved fiscalisation systems:

• ₦200,000 penalty, plus
• 100% of the tax due, plus
• Interest at the prevailing CBN rate

This provision is particularly relevant for VAT‑registered businesses. 3

9. Business with Non-Register Person

Section 101 of NTAA 2025 stipulates penalties of N5million for awarding contract or doing business with with an unregistered Taxable Person.

10. Criminal Sanctions

Section 109 – General Penalty for Serious Non‑Compliance

Upon conviction for serious tax offences:

• Imprisonment for up to three years, or
• A fine not less than the principal tax plus up to 50% penalty, or
• Both

This underscores that tax refusal may move from administrative default to criminal exposure. 2

Key Takeaway

Under the NTAA 2025, tax protest through non‑payment is legally indistinguishable from tax evasion. Penalties accrue automatically, interest compounds, and enforcement powers are robust. What begins as a symbolic protest can quickly become a financial and legal crisis.

Disclaimer

This article is provided for general information and educational purposes only. It does not constitute financial, tax, or legal advice. Readers are advised to seek professional guidance tailored to their specific circumstances.

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