New Nigerian Tax Act 2026: Updated Penalties, Fines, and Compliance Rules Taking Effect January 1, 2026

Nigeria’s new Tax Act will take effect on January 1, 2026, introducing wide-ranging reforms designed to improve economic fairness, expand national revenue, support low and middle-income workers, and close infrastructure gaps. To ensure proper compliance, the law outlines clear offences and penalties for individuals, companies, and institutions that violate tax regulations.

Below are the major offences and the penalties attached under the new framework.

Unauthorised Disclosure of Tax Information

Any person who releases confidential tax information without approval is liable, upon conviction, to a fine of up to ₦1,000,000 or imprisonment for a term of up to three years, or both.

False Claims on Tax Refunds

Submitting a false tax refund claim attracts a penalty of 50% of the amount involved, plus interest charged at the prevailing Central Bank of Nigeria (CBN) monetary policy rate.

Fictitious Value Added Tax Refund Claims

Providing a fake VAT refund claim leads to a penalty equal to 100% of the amount involved, including interest at the current CBN policy rate.

Default in the Payment of Mineral Royalties

Any entity that fails to remit mineral royalties will pay the outstanding royalty plus a penalty of 10% of the amount due. For transactions denominated in foreign currency, interest will be charged at the prevailing SOFR or successor rate plus 10%.

False Declarations

Anyone who issues, signs, or submits a tax-related declaration, notice, certificate, document, or statement containing false information faces an administrative penalty of ₦1,000,000 in addition to underpaid or unpaid tax. On conviction, offenders may also face imprisonment of up to three years or a fine of ₦1,000,000.

Counterfeiting Tax Documents

Individuals involved in producing or using counterfeit tax documents face an administrative penalty of ₦100,000, and on conviction, imprisonment of up to three years or a fine of ₦1,000,000, or both.

Offences Committed by Corporate Bodies

If a corporate organisation violates any provision of the tax law, key officers—including directors, managers, secretaries, partners, trustees, or anyone acting in similar managerial capacity—may be held individually responsible unless they can prove the offence occurred without their knowledge or involvement.

General Penalty for Unspecified Offences

Any person who violates the Act but for whom no specific penalty is provided will pay an administrative fine of ₦100,000 or face imprisonment of up to three years, or both.

Failure to Remit Tax Deducted at Source

Failure to remit taxes deducted attracts repayment of the outstanding amount, an administrative penalty of 10% per annum, and interest at the applicable CBN policy rate. On conviction, offenders may face imprisonment of up to three years or a fine not less than the principal amount plus up to 50% penalty.

Failure to Notify Change of Address

Failure to inform the tax authority of a change of address attracts a fine of ₦100,000 for the first month and ₦5,000 for each additional month of default.

Inducing or Attempting to Influence a Tax Officer

Individuals found guilty of attempting to influence or induce an authorised tax officer will pay a penalty of ₦500,000. Corporate bodies face a ₦2,000,000 penalty or imprisonment of up to three years, in addition to paying any tax due.

Use of Weapons During Tax-Related Offences

Carrying a weapon while committing a tax-related offence attracts imprisonment of up to five years.
In cases where an offender injures a tax officer while armed, the penalty increases to imprisonment of up to 10 years upon conviction.

Government Reaffirmation: Tax Reforms Will Reduce Burdens

Authorities have emphasised that the 2026 tax reforms are designed to ease the burden on citizens, not increase hardship. Officials say misinformation spreading across the country has created unnecessary fear.

During a courtesy visit to the National Orientation Agency, the Chairman of the Presidential Fiscal Policy and Tax Reforms Committee stated that the reforms include multiple exemptions for small businesses, low-income workers, middle-class earners, and even large companies. The aim is to simplify the tax system, reduce duplication, harmonise collections, and improve economic stability.

He also noted that widespread misinformation—ranging from online rumours to region-based distortions—was undermining public confidence. The agency has been urged to support nationwide sensitisation using local languages and relatable community figures.

Federal Government’s Port Modernisation Programme

As part of broader national economic upgrades, major port modernisation projects are underway in Lagos. The Apapa and Tin Can Island Ports are receiving a government-backed investment to improve cargo handling capacity, address congestion, and upgrade logistics systems.

The project is valued at $1 billion (approximately ₦1.5 trillion), with procurement initiated in October 2025 and full implementation expected to begin in Q2 2026. Planned works include berth expansion, infrastructure strengthening, digitised operations, and dredging to 16.5 metres to accommodate larger vessels.

Procedure for Correcting Tax Payments Made in Error

If a tax payment is mistakenly credited to the wrong taxpayer, the collecting bank can reverse the transaction within 24 hours once notified. If not detected on time, the Federal Inland Revenue Service may process a refund through its e-payment system, with the option for taxpayers to apply the amount toward future tax liabilities.

Presidential Position on Tax Compliance

The President previously stated that meaningful tax reforms often attract public resistance, especially from those who evade taxes. The government maintains that strengthening tax compliance is crucial for national development and sustainable public finance.