Nigerian Federal Government tightens tax enforcement, imposing penalties on individuals and companies failing to register or comply under the 2025 Act.
Nigerian Federal Government has intensified tax enforcement with the introduction of stiffer penalties under the Nigeria Tax Administration Act, 2025. The reforms aim to curb revenue leakages and improve compliance across the country’s tax system.
Under the Act, individuals and businesses failing to register for tax now face immediate financial consequences. Section 100 specifies that any taxable person who defaults on registration will incur a ₦50,000 fine in the first month, followed by ₦25,000 for each subsequent month of non-compliance.
The law also targets public-sector transactions. Companies or statutory bodies awarding contracts to unregistered entities face penalties of up to ₦5 million, signaling a crackdown on informal operators and reinforcing the government’s efforts to broaden the tax base.
Compliance obligations extend beyond registration. Section 101 stipulates penalties for failing to file tax returns or submitting inaccurate statements, with a first-month fine of ₦100,000 and ₦50,000 for every additional month of default. Taxpayers are also required to maintain proper accounting records. Under Section 102, individuals can be fined ₦10,000 and companies ₦50,000 for failing to keep or present required books upon request.
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The reforms introduce measures to ease the burden on low- and middle-income earners. Individuals earning ₦100,000 or less per month will be exempt from personal income tax starting January 2026. Middle-income earners with salaries between ₦100,000 and ₦2 million per month will see reduced tax rates, effectively increasing disposable income without additional salary adjustments.
Technology-driven compliance is a key focus. Section 103 imposes a ₦1 million penalty on the first day of refusing tax authorities access or failing to implement mandated tax technology, followed by ₦10,000 for each subsequent day. Non-compliance with the government-approved fiscalisation system will incur a ₦200,000 fine, plus the full tax owed and interest at the Central Bank of Nigeria’s prevailing rate.
Withholding tax violations are also strictly enforced. Section 105 imposes a 40 percent penalty on taxes not deducted or withheld, and failure to remit withheld taxes can result in imprisonment of up to three years or fines exceeding the original tax liability.
Analysts say the reforms demonstrate Nigeria’s commitment to boosting non-oil revenue, strengthening tax discipline, and aligning domestic tax administration with international best practices amid mounting fiscal pressures.