Companies and statutory bodies that award contracts to unregistered persons will now face a N5 million administrative penalty under Nigeria’s tax law. The Nigeria Tax Administration Act states that individuals who fail to register for tax will pay N50,000 in the first month of default and N25,000 for each additional month. “A statutory body or company who awards a contract to an unregistered person, shall be liable to pay an administrative penalty of N5,000,000,” the Act said.
The law also imposes penalties for failure to file tax returns or for knowingly submitting incomplete or inaccurate returns. Such offenders will pay N100,000 in the first month of default and N50,000 for each subsequent month. It further provides sanctions for refusing tax authorities access to deploy technology, including a N1 million penalty on the first day and N10,000 for each additional day of default.
“A taxable person that fails to process a taxable supply through the fiscalisation system is liable to an administrative penalty of 200,000 plus 100% of the tax due and an interest at the prevailing Central Bank of Nigeria Monetary Policy rate per annum,” the law said. It adds that failure to deduct or withhold tax attracts a 40 percent penalty, while offenders may also face up to three years’ imprisonment or fines.
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