As Nigeria prepares to implement its overhauled tax legislation on January 1, 2026, authorities have outlined a comprehensive set of offences and penalties in new Nigerian Tax Act designed to enforce strict compliance, enhance revenue mobilisation, and promote equity within the taxation system.
The revised regime, contained in the new Nigerian Tax Act, seeks to address long-standing gaps within the country’s tax enforcement framework and ensure greater accountability among individuals, corporations, and other legal entities.
The Federal Government has repeatedly emphasised that the new law is a cornerstone of its broader economic restructuring strategy aimed at supporting low- and middle-income earners, closing infrastructural gaps, and promoting fairness in the distribution of the national tax burden.
This second part of the report highlights key infractions and the corresponding sanctions outlined in the legislation.
Offences and Penalties in New Nigerian Tax Act: Unauthorized Disclosure and False Claims
One of the major provisions under the offences and penalties in the new Nigerian Tax Act is the criminalisation of unauthorised disclosure of taxpayer information.
Any officer or individual who unlawfully releases confidential tax data now faces a fine of up to N1 million, a prison term of up to three years, or both.
Authorities say this provision is aimed at safeguarding sensitive financial records and maintaining public trust in the tax system.
The Act also outlines stiff consequences for false claims of tax refunds.
Individuals who fraudulently request tax reimbursements are now liable to a penalty equal to 50 per cent of the false amount claimed, in addition to interest at the prevailing Central Bank of Nigeria (CBN) Monetary Policy Rate.
For cases involving fictitious Value Added Tax (VAT) refund claims, the sanctions are even more severe, with offenders required to pay 100 per cent of the amount falsely claimed plus accumulated interest.
Regulators say the move is intended to curb rampant abuse of refund channels, which have cost the country billions in lost revenue.
Offences and Penalties in New Nigerian Tax Act: Mineral Royalties and False Declarations
The Act also provides clear punishment for default in the payment of mineral royalties—an area plagued by underreporting and illicit practices.
Defaulters will now pay an additional 10 per cent of the royalty due, while foreign currency transactions attract penalties based on the SOFR or successor rates, plus 10 per cent.
False declarations, forged certificates, and deceptive documentation attract some of the harshest sanctions under the new law.
Any person who knowingly makes, signs, or submits untrue declarations for tax purposes faces an administrative penalty of N1 million, in addition to paying the outstanding taxes.
Upon conviction, such an offender may face fines, imprisonment of up to three years, or both.
Government officials say the decisive measures are aimed at eliminating fraud and promoting transparency across the extractive and corporate sectors.
Offences and Penalties in New Nigerian Tax Act: Counterfeiting, Corporate Liability, and General Sanctions
Counterfeiting tax documents—a recurring issue in corporate fraud investigations—is also addressed.
Individuals found guilty face an administrative penalty of N100,000, and upon conviction, a fine of N1 million, a prison sentence of up to three years, or both.
Importantly, the Act expands liability for offences committed by corporate bodies, partnerships, trusts, and associations.
Directors, managers, trustees, and even individuals acting in proxy capacities may be held personally accountable unless they can prove that the offence occurred without their knowledge or consent.
According to tax experts, this provision is expected to strengthen internal compliance systems within organisations.
Where a specific penalty is not provided, the Act introduces a general penalty clause, stipulating an administrative fine of N100,000, or imprisonment of up to three years, or a combination of both.
Offences and Penalties in New Nigerian Tax Act: Failure to Remit, Address Violations, and Inducement
Under the revised framework, failure to remit taxes deducted at source remains one of the gravest offences.
Individuals or organisations that withhold taxes but fail to remit them will pay the outstanding amount, an administrative penalty of 10 per cent per annum, and interest at the CBN policy rate. For self-accounting taxpayers, similar penalties apply.
Beyond financial sanctions, offenders may face imprisonment of up to three years, or fines amounting to the principal tax owed plus up to 50 per cent in penalties.
Failure to notify the tax authorities of a change of address attracts a fine of N100,000 for the first month and N5,000 for each subsequent month of non-compliance.
Inducing authorised tax officers—an increasingly common problem—now carries a penalty of N500,000 for individuals and N2 million for corporate entities. In addition, offenders may face imprisonment of up to three years.
Offences and Penalties in New Nigerian Tax Act: Weapon Use and Assault on Tax Officers
The new Act also criminalises the use of offensive weapons during tax-related offences. Individuals carrying weapons while violating tax laws face imprisonment of up to five years.
Those who injure or assault tax officials during enforcement operations face even stiffer penalties—up to 10 years in prison upon conviction.
According to authorities, these measures are intended to protect tax officers who frequently face threats and physical attacks during field assignments.
As Nigeria transitions into the implementation phase of the new Tax Act, regulators insist that the strict penalties are essential for strengthening compliance, boosting government revenue, and building a fairer economic environment.
With the law’s commencement date fast approaching, taxpayers—individual and corporate alike—are being urged to familiarise themselves with the new rules to avoid hefty sanctions.
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