Nigerian tax penalties in 2026: Late filing costs ₦50,000 first month + ₦25,000 each additional month. Late payment incurs 10% penalty plus 21% annual interest. Under-declaration triggers 100% penalty on underpaid tax. Tax evasion can result in ₦100,000 fine and up to 3 years imprisonment. Penalties are enforced by FIRS and State Internal Revenue Services.
Nigerian Tax Penalties & Fines 2026
Understand the consequences of non-compliance and how to avoid them
What happens if I don't file my Nigerian tax return?
If you don't file your Nigerian tax return by March 31, you face: (1) ₦50,000 penalty for the first month late, (2) additional ₦25,000 for each subsequent month, (3) 21% annual interest on unpaid tax, and (4) potential prosecution for continued non-compliance. The total cost can quickly exceed the original tax owed.
Complete Penalty Schedule
Penalties for Non-Compliance
| Violation | Penalty | Notes |
|---|---|---|
| Late Filing of Returns | ₦50,000 + ₦25,000/month | Deadline: March 31 for individuals |
| Late Payment of Tax | 10% of tax + 21% p.a. interest | Interest calculated from due date |
| Failure to Deduct WHT | 10% - 200% of unremitted tax | Applies to payers making qualifying payments |
| Under-declaration of Income | 100% - 150% of underpaid tax | Plus interest from original due date |
| Failure to Register for TIN | ₦50,000 (individual) / ₦500,000 (company) | TIN required for all taxable persons |
| VAT Non-Compliance | 5% p.a. + ₦50,000 + seizure | Registration required at ₦25M turnover |
How Tax Penalties Compound
Example: ₦500,000 Tax Owed, Filed 6 Months Late
That's 55% more than the original tax—just for being 6 months late!
How to Avoid Tax Penalties
File On Time
Individual returns: March 31. Company returns: 6 months after financial year-end. Set reminders well in advance.
Pay Estimated Tax
Self-employed? Pay quarterly estimates to avoid large year-end bills and late payment penalties.
Keep Records
Maintain 6 years of records. If audited, good documentation prevents under-declaration penalties.
Respond to Notices
Never ignore FIRS correspondence. Quick responses show good faith and may reduce penalties.
Voluntary Disclosure Program
If you have past-due taxes, FIRS offers reduced penalties for voluntary disclosure before they discover the issue. Coming forward typically results in:
- Criminal prosecution
- Reduced or waived late filing penalties
- Interest still applies (but negotiable payment plans)
Frequently Asked Questions
What is the penalty for late tax filing in Nigeria?
Late filing attracts ₦50,000 for the first month plus ₦25,000 for each subsequent month. Additionally, interest of 21% per annum (about 1.75% per month) is charged on the unpaid tax amount.
Can I be jailed for not paying tax in Nigeria?
Yes, in extreme cases. Tax evasion (deliberately hiding income) can lead to criminal prosecution with fines up to ₦100,000 and/or imprisonment up to 3 years. However, most penalties are financial.
How do I avoid tax penalties?
File your returns on time (March 31 for individuals), pay estimated taxes quarterly if self-employed, keep proper records, and respond promptly to any FIRS notices.
Can tax penalties be waived?
FIRS has discretion to waive or reduce penalties in genuine cases, especially for first-time offenders who voluntarily disclose. Apply in writing with supporting documents.
What happens if my employer didn't remit my PAYE?
Technically, your employer is liable for the tax plus penalties. However, FIRS may still demand payment from you, so verify your PAYE remittance regularly and report non-compliance.
Don't Risk Penalties
Calculate your tax and file on time with KeepAm