NIGERIA TAX ADMINISTRATION ACT, 2025

This section requires all individuals and entities that are subject to tax to register with the tax authority and get a Tax ID to ensure they meet their tax responsibilities.

This section mandates that all government bodies at the federal, state, and local levels must also register for tax and obtain a Tax ID.

This section states that non-residents who provide taxable goods or services in Nigeria or earn income from Nigeria must register for tax and get a Tax ID. However, those who only earn passive income may not need to register but must still provide certain information.

This section explains the process for obtaining a Tax ID from the tax authority, including how to register, what to do if registration is denied, and the rules regarding multiple Tax IDs.

This section outlines how a Tax ID must be used, including its requirement on tax documents and contracts, and mandates that financial service providers ensure their clients have a Tax ID.

This section requires taxable persons to inform the tax authority within 30 days of any changes to their personal or business information, such as name, address, or ownership details.

This section explains the procedures for suspending or cancelling a Tax ID if a business temporarily or permanently stops operating, including the need to notify the tax authority.

If someone lies or misrepresents information to get tax benefits, they can face a fine of ₦15 million and additional penalties based on the tax amount involved. This applies to anyone who helps others do the same.

Tax officials who misuse their power, such as demanding more tax than allowed or stealing collected taxes, can face severe penalties, including fines up to 200% of the amount involved or imprisonment for up to three years.

If petroleum royalties are not paid within 30 days of the due date, specific legal actions outlined in section 129 will be taken.

If a person doesn't submit their tax return, the tax authority can estimate how much tax they owe and issue an assessment. This assessment doesn't change any other tax obligations they might have.

If the tax authority finds that someone hasn't been properly assessed for tax, they can reassess them within six years. If there's evidence of intentional misreporting, they can reassess at any time.

Tax assessments for companies in the oil sector must follow specific formats and include details like the company's name and the profits they made. If changes are needed, they must be documented similarly.

If a business isn't making expected profits or if profits can't be determined, the tax authority can estimate profits based on a fair percentage of their income. This applies differently for residents and non-residents.

Taxes must be assessed in the currency used for the transaction. If a different currency is used, taxes must be paid in that currency, especially for oil-related transactions which are calculated in US Dollars.

The tax authority must send a notice to each taxpayer about their tax assessment, including where to pay and their rights regarding the assessment.

If a taxpayer disagrees with their tax assessment, they can formally object within 30 days. They must provide specific reasons for their objection, and the tax authority must respond within 90 days.

Mistakes in the assessment process won't invalidate it as long as the main details are correct and the right company is identified. Minor errors won't affect the validity of the assessment.

If no objections or appeals are made against a tax assessment within the required time, it becomes final. If the tax isn't paid on time, recovery actions will be taken.

The tax authority must keep a list of all taxpayers, including their names, addresses, and the taxes they owe. This list helps in managing tax assessments.

The manager or principal officer of a company is responsible for ensuring that the company meets its tax obligations.

If the tax authority believes that a transaction is not genuine and is designed to reduce tax liability, they can disregard it and adjust the tax owed. This applies especially to transactions between related parties.

The tax authority can challenge arrangements that are primarily designed to avoid taxes unless the taxpayer can prove that the arrangement is legitimate and complies with tax laws.

Tax authorities will share information to ensure compliance with tax laws. If one authority finds issues during an audit, they can collaborate with another authority to address it.

Everyone must pay their taxes on time, either in full or in installments. If there are disputes, payments can be delayed until resolved, but any unpaid taxes will incur penalties and interest.

Companies in the oil and gas sector must pay their taxes in monthly installments, with a final payment due at the end of the accounting period. This ensures they manage their tax obligations throughout the year.

When payments are made, the payer must deduct the appropriate tax before handing it over. This applies to various payments like dividends and salaries, ensuring taxes are collected upfront.

Anyone responsible for paying taxes on behalf of someone else can keep enough money to cover the tax and is protected from claims related to those payments.

When a company is closing down, its assets can't be distributed to shareholders until all taxes owed are paid. If taxes aren't paid, the liquidator can be held personally responsible.

If a company in the oil sector transfers its assets to avoid paying taxes, the tax authority can recover those taxes from the new owner of the assets.

Taxpayers who overpay their taxes can get refunds after an audit. Refunds must be processed within 90 days, and claims must be made within six years.

If someone qualifies for a VAT refund, they must request it within 12 months. The tax authority will process valid requests within 30 days.

The tax authority can request information from taxpayers, including returns and documents, to verify tax liabilities. Taxpayers must comply within a specified time and can request extensions if needed.

Tax officers have the right to access any property, documents, or records necessary for tax collection. They can take possession of digital records if needed for investigations.

Tax officers can take documents for copying during investigations. The originals must be returned promptly, and the owner can request copies at their own expense.

The tax authority can appoint an agent to collect taxes from a taxpayer's funds if they fail to pay. This agent has the same responsibilities as the taxpayer.

If a tax assessment is final and payment isn't made, the tax authority can seize assets to recover the owed tax. They can keep these assets for 14 days before selling them if the tax isn't paid.

The tax authority can enlist law enforcement to help enforce tax laws, including entering properties and seizing documents related to tax offenses.

If a company in the oil or mining sector fails to pay taxes after being notified, the tax authority will inform the relevant agency to revoke their operating license.

The tax authority can investigate any suspected tax violations and has the power to arrest offenders. They can also prevent the disposal of property related to ongoing investigations.

If taxes aren't paid on time, a penalty of 10% is added, and interest will accrue based on current rates. The tax authority can enforce payment if the tax isn't settled within 30 days of a demand notice.

The tax authority can waive penalties or interest for valid reasons and must report these waivers to the finance minister.

The tax authority can hire third parties to collect unpaid taxes after all other recovery efforts have failed. Taxpayers will be informed if their debts are assigned.

The tax authority can offer rewards for information that helps them in their work, and the identity of informants will be kept confidential.

The tax authority can reward individuals who provide helpful information, while keeping their identities confidential. If someone reveals the identity of the informant, they will face penalties.

All actions taken by the tax authority must be approved by the Chairman or an authorized officer.

The tax authority can use technology to improve tax processes, including assessments and collections, especially for digital services.

If you have paid all your taxes, the tax authority will issue a tax clearance certificate within two weeks of your request. This certificate is needed for various official applications and shows your tax history for the last three years.

Taxpayers can request advance rulings from the tax authority for clarity on tax laws. The authority must respond within 21 days, and the ruling will specify its validity and conditions.

The tax authority can deny requests for advance rulings if they involve foreign laws, ongoing court cases, or other specific issues.

Advance rulings are specific to the applicant and their situation. They become invalid if the facts change or if the relevant tax laws are amended or overturned by a court.

The tax authority can cancel or change an advance ruling if it was obtained through fraud, and they must inform when this change takes effect.

The President and State Governors can forgive all or part of a person's tax if they believe it is fair to do so, based on recommendations from financial authorities.

The President can exempt certain companies from income tax with the National Assembly's approval, and this must be officially published.

The President will officially appoint an agency to oversee virtual assets, and those involved in virtual asset activities must follow specific regulations.

The Accountant-General can deduct unpaid taxes directly from government budgets and must send those funds to the tax authority.

VAT revenue will be shared among the Federal, State, and Local Governments, with specific percentages allocated to each level of government.

The tax authority must report tax collections and refund claims monthly, and the Accountant-General will deduct refund amounts before distributing tax revenue.

A National Single Window Portal will be created to simplify trade processes, allowing users to submit documents and make payments electronically.

Official documents for the tax authority can be delivered directly to the Chairman or sent via registered mail or email.

The tax authority can update and simplify the forms and documents needed for tax administration.

Legal proceedings do not stop individuals from fulfilling their tax obligations.

Each State will have its own Internal Revenue Service to manage tax matters independently.

The State Internal Revenue Service will handle tax assessments, collections, and compliance checks for individuals and entities within the state.

Each State will have a Management Board to oversee its Internal Revenue Service, consisting of various appointed members, including the Executive Chairman.

The State Governor will appoint an Executive Chairman for the State Internal Revenue Service, who will manage its operations and must have relevant tax experience.

The State Board will set policies, manage operations, and oversee staff for the State Internal Revenue Service, ensuring efficient tax administration.

A Technical Committee will be formed to provide expert advice and recommendations to the State Board on tax matters.

Each local government area will have a Revenue Committee to oversee local tax matters, led by the Finance Supervisor.

The Revenue Committee will handle all tax assessments and collections for the local government, operating independently from the local treasury.

Each State will have a Joint Revenue Committee to coordinate tax efforts between state and local governments, including various representatives.

The State Joint Revenue Committee will help implement tax policies and provide guidance on revenue matters to both state and local governments.

The tax authority can delegate its powers to authorized officers and can change any decisions made by those officers regarding taxes.

The relevant Board can delegate its powers and can change decisions made by its officers if those decisions were incorrect or not lawful.

The Executive Chairman of the tax authority has specific powers, but these can also be delegated to other authorized officials.

If you don't register for tax, you'll face fines starting at ₦50,000, and companies that hire unregistered individuals will incur a penalty of ₦5,000,000.

Not filing tax returns or submitting incorrect ones will result in fines starting at ₦100,000, with additional penalties for ongoing failures.

Failing to maintain proper financial records will lead to penalties of ₦10,000 for individuals and ₦50,000 for companies.

If you deny the tax authority access to use technology for tax purposes, you will face a fine starting at ₦1,000,000.

Not using the required fiscalisation system for tax processing will result in a penalty of ₦200,000 plus the tax owed.

If you fail to withhold the required taxes, you will incur a penalty of 40% of the amount that should have been deducted.

Not making required attributions or failing to notify the tax authority will result in a penalty of ₦1,000,000.

Failing to remit deducted taxes on time will incur penalties, including a 10% annual fee on the unpaid amount, and could lead to imprisonment.

Ignoring tax notices or failing to provide requested information will lead to escalating fines, starting at ₦100,000.

Virtual Asset Service Providers (VASPs) face heavy penalties for non-compliance, starting at ₦10,000,000 for the first month.

Not stamping required documents will incur a penalty of 10% of the unpaid duty plus interest.

Not fully disclosing information on tax documents can lead to fines or imprisonment.

Failing to update your address with the tax authority will result in fines starting at ₦100,000.

Tampering with revenue stamps can lead to severe penalties, including imprisonment.

Tax officials who engage in corrupt practices or fraud will face severe penalties, including fines and imprisonment.

Trying to bribe a tax officer for benefits will result in heavy fines or imprisonment.

Using a weapon during a tax-related offence can lead to significant prison time.

Impersonating a tax officer is a serious offence that can lead to fines or imprisonment.

Helping someone commit a tax offence can lead to fines or imprisonment.

Obstructing tax officials or interfering with their duties can lead to heavy fines or imprisonment.

Disclosing confidential taxpayer information without authorization can lead to fines or imprisonment.

Making false claims for tax refunds will result in penalties, including a 50% fine on the amount claimed.

False claims for VAT refunds will incur severe penalties, including a 100% fine on the claimed amount.

Unpaid mineral royalties will incur penalties and interest, compounding over time.

Making false statements or documents for tax purposes can lead to heavy fines and possible imprisonment.

Counterfeiting tax documents or seals is a serious offence that can lead to fines and imprisonment.

If a company commits a tax offence, its directors or managers can also be held responsible unless they prove they were unaware of the wrongdoing.

Violating any part of this Act without a specified penalty will result in a fine or imprisonment.

Companies that miss deadlines for tax returns will face heavy penalties, starting at ₦10,000,000 for the first day.

Late payments of taxes or royalties will incur penalties and interest, compounding over time.

Failing to respond to tax notices can lead to severe penalties, including fines of up to ₦10,000,000.

Providing false information for tax benefits can lead to severe penalties, including fines and additional tax liabilities.

Making false statements to gain tax benefits can result in heavy fines and additional tax liabilities.