individuals in Nigeria may face stiffer tax penalties starting January 1, 2026, as the Federal Inland Revenue Service (FIRS) — soon to be renamed the Nigeria Revenue Service (NRS) — prepares to enforce sweeping provisions under the newly signed Nigeria Tax Administration Act, 2025.
Signed into law by President Bola Tinubu on June 26, the Act introduces far-reaching reforms aimed at tightening compliance, eliminating loopholes, and increasing government revenue through stricter enforcement of tax obligations.
Heavy Fines for Non-Compliance
The Act outlines a wide range of offences with fines ranging from N10,000 to N10 million and, in some cases, imprisonment for up to 10 years.
Failure to register with the tax authority will attract a fine of N50,000 in the first month and N25,000 for each additional month. Companies that fail to file tax returns will pay N100,000 for the first month and N50,000 monthly until compliance.
Awarding contracts to unregistered vendors comes with a N5 million penalty. Also, businesses that fail to maintain proper financial records may face fines of N10,000 for individuals and N50,000 for companies.
Failure to notify the tax authority of a change of business address within 30 days will result in a fine of N100,000 initially and N45,000 for every additional month of default.
Tax Tech Is Now Mandatory
The law mandates businesses to adopt digital tax technology known as fiscalisation. Any company that refuses FIRS access to deploy this system will be fined N1 million for the first day of refusal and N10,000 per day after.
Transactions not processed through the system will attract a fine of N200,000, 100% of the tax due, and interest at the Central Bank of Nigeria’s (CBN) prevailing monetary policy rate.
Withholding and Remittance Offences
Entities that fail to remit deducted taxes by the 21st of the following month will be liable for the full amount, a 10% penalty per annum, and CBN-based interest. Offenders could also face up to three years imprisonment or a fine equal to the withheld sum plus an additional 50%.
Failure to respond to tax notices or provide requested documents could also result in a N100,000 fine on the first day and N10,000 for every day the default continues.
Crypto Platforms and VASPs Targeted
Virtual Asset Service Providers (VASPs), such as crypto exchanges, will face fines of N10 million in the first month of non-compliance and N1 million for every subsequent month. Their licences may be suspended or revoked by the Securities and Exchange Commission (SEC) if violations persist.
Penalties for Fraud and Obstruction
The law criminalises false statements, forged documents, and any attempt to obstruct tax officers. These infractions carry fines between N1 million and N2 million or jail terms of up to five years.
Persons impersonating tax officials face up to three years in jail or a N1 million fine, while filing fake VAT claims will result in full repayment, a 100% penalty, and interest.
Directors, trustees, or partners of companies may be held personally responsible for tax violations unless they can prove they had no knowledge of the breach.
A New Tax Era
The Tax Administration Act replaces a patchwork of outdated laws and sets the tone for stricter enforcement. Analysts say the law is designed to modernise Nigeria’s tax regime, boost revenue, and foster accountability among businesses.
“This is a wake-up call for all taxpayers. Compliance is no longer optional, and ignorance won’t be a defence,” said tax consultant Nkechi Ibe. “With the NRS now empowered, enforcement will be swift and unforgiving.”
As the 2026 implementation date approaches, businesses are being urged to update their tax records, digitise their operations, and ensure full compliance to avoid the steep fines and criminal liabilities ahead.
@2025 The Ameh News: All Rights Reserved
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