December 09, (THEWILL) — Nigeria’s newly enacted Tax Administration Act 2025 has introduced some of the toughest tax-compliance penalties in the country’s history, including a N10 million fine and up to 10 years imprisonment for serious offences such as assaulting tax officials.
The law, which becomes fully operational on January 1, 2026, forms part of the sweeping reforms that also transition the Federal Inland Revenue Service (FIRS) into the newly named Nigeria Revenue Service (NRS).
The Act outlines wide-ranging penalties targeted at individuals, companies, and operators in the digital economy. According to a BusinessDay report, offenders who physically attack tax officers or obstruct their duties face a N10 million penalty alongside a possible 10-year jail term.
The punishment is even stiffer where weapons are used or officers sustain injury during enforcement activities.
Beyond physical offences, the law significantly raises the stakes for financial and administrative non-compliance. Virtual Asset Service Providers (VASPs)—including cryptocurrency platforms now face an initial N10 million fine for the first month of default, followed by N1 million for each additional month, and risk licence suspension or revocation if they continue to breach tax obligations.
The Act also criminalises a variety of everyday tax failures. These include failure to respond to official notices, refusal to maintain proper books, non-remittance of withheld tax, and failure to file accurate returns.
Offences attract penalties ranging from daily fines to custodial sentences of up to three years. In some cases, defaulters must pay the outstanding tax plus a surcharge of 50% of the principal amount, in addition to interest and potential prosecution under the law.
Tax experts note that the framework is designed to boost compliance and strengthen enforcement capacity as Nigeria seeks greater non-oil revenue mobilisation.
Analysts also highlight the law’s heavy focus on digitalisation and fiscalisation, signalling a shift toward data-driven tax administration across the economy.
However, business groups are expected to raise concerns in the coming months over enforcement risks, potential overreach, and the readiness of small and medium enterprises (SMEs) to adapt before the Act becomes effective.
The NRS is expected to roll out guidelines, compliance procedures, and public-awareness campaigns ahead of the 2026 commencement date, as companies and individuals prepare for what is shaping up to be Nigeria’s most consequential tax-compliance regime.
Ogochukwu Onwaeze
