Nigeria’s new Tax Act introduces stricter rules and enforces tougher penalties for non-compliance.
Consequently, virtual asset service providers now face ₦10 million fines for the first month of default.
Moreover, each extra month attracts a ₦1 million penalty, and the SEC can suspend their licences.
Stricter Penalties For Tax Offences
The Act takes full effect on January 1, 2026 and will reform tax administration nationwide.
Its goal is to strengthen compliance, raise revenue, and modernise Nigeria’s tax systems.
Additionally, the Act targets anyone inducing a tax officer, imposing heavy penalties on individuals and companies.
Individuals must pay ₦500,000, while companies pay ₦2 million for the same offence.
Furthermore, offenders may spend up to three years in prison.
If a person uses a weapon during a tax offence, authorities will imprison them for up to five years.
Similarly, injuring a tax officer while armed can lead to a ten-year jail term.
Compliance Rules And Digital Enforcement
Taxpayers who fail to register now pay ₦50,000 in the first month and ₦25,000 afterward.
Meanwhile, those who do not file VAT returns pay ₦100,000 initially and ₦50,000 in subsequent months.
Also, companies that fail to keep proper records face a ₦50,000 fine.
The Act emphasises digital tax operations.
If a business blocks technology deployment, authorities will fine them ₦1 million on the first day.
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Then, each following day adds ₦10,000 in penalties.
Moreover, companies that avoid using the fiscalisation system must pay ₦200,000 plus 100% of the tax owed.
If a taxpayer fails to deduct required tax, the authorities will impose a penalty equal to 40% of the amount involved.
Additionally, failing to make attribution brings a ₦1 million penalty.
If companies withhold deducted tax, they must pay the full amount, 10% annual administrative charge, and interest.
Stamp Duty And Fraud Enforcement
Taxpayers who ignore official notices face ₦100,000 fines on the first day.
Then, authorities add ₦10,000 for each extra day until they comply.
Those who refuse to provide required documents pay ₦200,000 initially.
Furthermore, each following day adds ₦10,000 for continued non-compliance.
Similarly, ignoring legal circulars incurs ₦1 million for the first day and ₦10,000 per additional day.
For stamp duty offences, authorities impose 10% of unpaid duty plus interest.
If a person fails to disclose facts, officials can fine them or sentence them to up to three years.
Additionally, failing to report a change of address results in ₦100,000 initially and ₦5,000 thereafter.
Authorities now punish stamp-related fraud with at least ₦2 million in fines or three years in prison.
Also, offences involving authorised or unauthorised persons bring fines equal to 200% of the amount involved.
If someone impersonates a tax officer, officials impose fines up to ₦1 million or three years in prison.
Likewise, aiding tax offences carries the same penalties.
Moreover, obstructing tax authorities results in a ₦1 million administrative charge at first, with further fines or imprisonment if convicted.
With less than a year left, Nigeria prepares to enforce tax laws more strictly nationwide.
Ultimately, the Act aims to improve revenue, strengthen transparency, and modernise tax systems by 2026.
