The Digest:
A new provision in the Nigeria Tax Administration Act imposes a ₦5 million administrative penalty on companies and statutory bodies that award contracts to unregistered persons. The law introduces a stringent system of fines for various tax compliance failures, including penalties for individuals who refuse to register.
Key Points:
- Companies awarding contracts to unregistered persons face a ₦5 million fine.
- Individuals who fail to register for tax are liable for a ₦50,000 penalty in the first month, plus ₦25,000 monthly thereafter.
- Failure to file returns or submit inaccurate ones incurs an initial fine of ₦ 100,000, followed by ₦50,000 per additional month.
- Refusing tax authorities access to deploy technology results in a ₦1 million fine, plus ₦10,000 per day.
- Not processing taxable supplies through the fiscalisation system triggers a ₦200,000 penalty plus 100% of the tax due.
- Failing to deduct or withhold tax leads to a penalty of 40% of the amount not remitted.
- Convicted offenders may face up to three years' imprisonment or a fine of the principal tax plus 50%.
Sources: Business Day, NTAA, The Cable
