NTA 2025 Penalties for Late Filing: What You Risk and How to Avoid

The NTA 2025 penalties for late filing, late payment, and non-compliance are harsher than ever. Full penalty table, NTAA sections, and practical avoidance tips.

The penalties for late filing under the NTA 2025 and the Nigeria Tax Administration Act 2025 are not symbolic fines — they are structured to escalate every month until you comply, and in serious cases, they can lead to prosecution, imprisonment, and the closure of your business premises. Since January 2026, the Nigeria Revenue Service (NRS) has been actively enforcing these provisions, with state revenue services like the LIRS issuing public notices specifically warning taxpayers of the consequences.

If you missed a deadline, are approaching one, or are not sure what you owe, this guide spells out every penalty, who it applies to, and the practical steps to stay on the right side of the law.

Two Types of Penalties: Administrative and Criminal

The NTAA 2025 divides penalties into two categories, and you can face both simultaneously for the same offence.

Administrative penalties are immediate financial consequences imposed by the NRS or State Internal Revenue Service without needing a court order. They are applied automatically when a default is identified — late filing, late payment, failure to deduct tax, failure to register. You receive a penalty notice, and the amount is added to your tax debt.

Criminal sanctions require prosecution through the courts. They apply to more serious offences — false declarations, obstruction of tax officers, failure to remit tax deducted at source, and fraud. Conviction can result in fines, imprisonment, or both. Under Section 161 of the NTAA, company directors and officers can be held personally liable for wilful or negligent tax breaches by their company. This is a significant shift — the corporate veil no longer fully protects individual officers from tax enforcement.

The Full Penalty Table

Here is a consolidated reference of the key penalties under the NTAA 2025 and the NTA 2025, with section references:

These penalties are cumulative. A company that fails to file and also fails to remit tax deducted at source faces both sets of penalties simultaneously — they do not cancel each other out.

Late Filing: The Most Common and Most Avoidable Penalty

Under Section 101 of the NTAA, any taxable person who fails or refuses to file returns — or knowingly files incomplete or inaccurate returns — is liable to an administrative penalty of ₦100,000 in the first month of default and ₦50,000 for each subsequent month the failure continues. This applies to all return types: CIT annual returns, individual PIT returns, monthly VAT returns, WHT returns, and employer PAYE annual returns.

The maths escalates quickly:

For a small company paying 0% CIT, a two-year filing delay generates ₦1.25 million in penalties on a tax bill of zero. The penalty is independent of the amount of tax owed. You pay for being late regardless of whether you owe anything.

For businesses with multiple return types (CIT, VAT, WHT), each missed return attracts its own penalty. A company that is six months late on both its CIT annual return and its monthly VAT returns could face ₦350,000 on the CIT return plus ₦350,000 on each of the six missed VAT returns — totalling well over ₦2 million.

Late Payment: The Surcharge That Starts Immediately

Section 142 of the NTAA introduces surcharges on late payment — automatic interest charges that begin accumulating the day after the payment deadline. This replaces the old penalty system with a continuous cost that grows daily.

The surcharge is calculated at rates prescribed by the NRS, typically linked to the CBN Monetary Policy Rate. At the current MPR, this can add 25–30% per annum to your unpaid tax balance. Unlike the old system where penalties were applied periodically, the surcharge accrues continuously — every single day your payment is outstanding adds to the total.

The surcharge is separate from — and in addition to — any late filing penalty. If you file late and pay late, you face both the Section 101 filing penalty and the Section 142 payment surcharge.

This is why filing on time matters even if you cannot pay immediately. The filing penalty stops accruing once you submit your return. The payment surcharge continues until the balance is cleared. Filing on time and paying late is always cheaper than doing both late.

Failure to Remit Tax Deducted at Source

This is the most heavily penalised offence for employers and businesses that deduct withholding tax or PAYE. If you deduct tax from payments to employees, contractors, or suppliers and fail to remit it to the tax authority, Section 107 of the NTAA imposes three simultaneous penalties:

1. The full amount of tax deducted but not remitted (you still owe the original amount)
2. An administrative penalty of 10% per annum of the unremitted amount
3. Interest at the prevailing CBN Monetary Policy Rate

And if prosecuted, conviction under Section 107 can result in imprisonment of up to three years, or a fine of the principal amount plus up to 50% penalty, or both.

The rationale is that tax deducted at source is considered “trust money” — it belongs to the government from the moment it is deducted. Holding it, diverting it, or failing to remit it is treated with the same severity as misappropriation.

Penalties That Hit Businesses the Hardest

The ₦5,000,000 Unregistered Contractor Penalty

Section 100(2) of the NTAA imposes a ₦5,000,000 fine on any person or entity that awards a contract to an unregistered person where registration is required. This means that if you engage a supplier, contractor, or vendor who does not have a valid TIN and tax registration, you — not the supplier — face the penalty.

The practical implication is that vendor onboarding must now include TIN verification. Collect and verify every supplier’s TIN before the first payment. The NRS cross-references payment data, and discovering an unregistered contractor in your vendor list during an audit is a ₦5 million problem.

The E-Invoicing Non-Compliance Penalty

Failure to use the approved electronic fiscal system (e-invoicing) carries a penalty of ₦200,000 plus 100% of the tax due, plus interest at the CBN rate. But the operational penalty is even worse: invoices not processed through the approved system are non-compliant, and any input VAT claimed on non-compliant invoices is disallowed. This means you lose the VAT recovery on every affected purchase — a cost that can dwarf the administrative fine.

Business Premises Closure

Section 159(3) of the NTAA authorises the temporary closure of non-compliant business premises. This was previously reserved for the most extreme cases. Under the new regime, it applies more broadly and gives the NRS a powerful enforcement tool — particularly against businesses that persistently ignore filing and payment obligations.

Director and Officer Personal Liability

Section 161 of the NTAA allows the personal liability of company directors and officers for wilful or negligent tax breaches. If a company fails to file, fails to remit, or makes false declarations due to the wilful action or negligence of a director or officer, that individual can be held personally liable for the company’s tax debt and penalties. The corporate structure does not shield the individual from responsibility.

How Penalties Compound: A Realistic Scenario

Consider GreenFields Ltd, a Lagos company with a December year-end. The company’s accountant resigned in February 2026, and the new hire did not understand the deadlines. Here is what happens:

Missed CIT annual return (due 30 June 2026): By December 2026, the company is six months late. Filing penalty: ₦100,000 + (5 × ₦50,000) = ₦350,000.

Missed six monthly VAT returns (each due by the 21st of the following month): Each return attracts its own penalty. If the first missed return is now six months late and the most recent is one month late, total VAT filing penalties range from ₦100,000 to ₦350,000 per return. Combined: over ₦1,500,000.

Unpaid CIT balance of ₦3,000,000 (due 30 June 2026): By December 2026, the surcharge at 27% per annum (approximately the CBN MPR) adds roughly ₦405,000 in interest over six months.

Unremitted PAYE totalling ₦1,200,000 (six months of employee deductions): Amount owed: ₦1,200,000 + 10% per annum penalty (₦60,000) + CBN MPR interest (approximately ₦162,000). Total PAYE exposure: ₦1,422,000 — plus the risk of criminal prosecution.

Total penalty exposure for GreenFields by December 2026: approximately ₦3,677,000 in penalties, surcharges, and interest — on top of the original tax owed. One missed deadline cascaded into nearly four million naira in avoidable costs.

Your Rights: Objections, Reviews, and Appeals

The NTAA does not leave you without recourse. If you believe a penalty has been wrongly imposed, you have options:

• Request clarification. You can ask the NRS to explain the basis of an imposed penalty. This is your first step before escalating.
• Apply for review. If circumstances justify it — for example, a genuine system error, a natural disaster, or a medical emergency — you can apply for a review of the penalty. The NRS has discretion to waive or reduce penalties, though this is not guaranteed.
• Object within statutory timelines. If you disagree with a tax assessment or penalty, you must object in writing within the prescribed period (typically 30 days). Late objections may be rejected.
• Request an advance ruling. If you are unsure about the correct treatment of a transaction or obligation, you can apply to the NRS for an advance ruling under the NTAA. The ruling provides clarity before you act, reducing the risk of accidental non-compliance.
• Appeal to the Tax Appeal Tribunal. If your objection is rejected, you can appeal to the Tax Appeal Tribunal. Note that you must deposit 50% of the disputed tax amount to lodge an appeal. This requirement is the subject of ongoing legal debate, but as of now, it applies.

For any dispute involving significant amounts, engage a qualified tax professional immediately. The timelines are short, and missing the objection window can lock you into a penalty you might have successfully challenged. Find experienced practitioners through our Tax Professional Directory.

How to Avoid Every Penalty on This List

Every penalty in the NTAA 2025 is avoidable. None of them require complex tax planning — they require basic compliance discipline. Here is a practical checklist:

1. Build a Tax Compliance Calendar

Map every filing and payment deadline for your business across the full year. At minimum, this includes:

Set reminders one week before each deadline. Do not rely on memory — use calendar alerts, accounting software reminders, or a dedicated compliance tracker.

2. File on Time — Even If You Cannot Pay

Filing and payment are separate obligations with separate penalties. If cash flow is tight, file your return on time and pay what you can. The filing penalty stops once the return is submitted. The payment surcharge continues but is smaller than the combined cost of late filing plus late payment. Filing first, paying later is always the cheaper option.

3. Automate Where Possible

Use payroll software that automatically computes PAYE, generates remittance schedules, and flags deadlines. Use accounting software that tracks VAT input and output, generates monthly returns, and integrates with the NRS e-invoicing system. Automation removes the human error that causes most late filings.

4. Verify Every Supplier’s TIN

Build TIN verification into your vendor onboarding process. No TIN, no contract, no payment. The ₦5 million penalty for engaging unregistered contractors is one of the most easily avoided penalties — and one of the most expensive when you do not avoid it. Verify TINs at taxid.nrs.gov.ng.

5. Keep Records for Six Years

The NRS can audit any year within a six-year window — and beyond that if fraud or deliberate misstatement is suspected. Maintain financial statements, tax returns, payment receipts, WHT credit notes, e-invoicing records, and all supporting documentation. The ₦50,000 record-keeping penalty (for companies) is the least of your worries — the real risk is being unable to defend your position on audit, leading to reclassification, additional assessments, and compound interest.

6. Use Accredited Tax Agents for Company Returns

Returns filed by unaccredited practitioners are deemed not filed under the NTAA. This means you face the Section 101 late filing penalty even though you submitted something — because the “something” does not count. Verify your tax agent’s accreditation with the NRS before they file on your behalf.

7. Report Changes Within 30 Days

If you change your business address, trading name, ownership structure, or contact details, notify the NRS or your State IRS within 30 days. The penalty for not doing so is ₦100,000 for the first month and ₦5,000 for each month after. More importantly, misdirected notices — because the tax authority has your old address — can cause you to miss assessment notices and objection deadlines, compounding your exposure.

8. Act Immediately If You Have Missed a Deadline

If you are already in default, file and pay today. Every day of delay adds to the penalty. There is no benefit to waiting — the penalties do not reset, they do not have grace periods, and the NRS does not offer informal extensions. File through the NRS Self-Service Portal at selfservice.nrs.gov.ng and make payment immediately through the integrated channels.

If the amount is significant or you face multiple defaults, consult a tax professional before filing to understand the full exposure and explore whether a voluntary disclosure or payment arrangement might reduce the penalty burden. Find one through our Tax Professional Directory.

What If You Genuinely Cannot Pay?

The NTAA does not provide a formal instalment plan for outstanding penalties and surcharges in the way some other jurisdictions do. However, for CIT specifically, companies may apply to pay in up to three instalments if the request is made at the time of filing, within six months of the accounting year-end.

For other tax types, contact the NRS to discuss your situation. The NRS has discretion to agree to payment arrangements in practice, though this is not codified as a right. The key is to engage proactively — ignoring the debt only accelerates the surcharge and increases the likelihood of enforcement action (garnishment, liens, or premises closure).

Whatever you do, file the return on time. The filing penalty is the one cost that is entirely within your control to avoid.

Final Thoughts

The NTAA 2025 penalty regime is designed around a simple principle: compliance is cheaper than non-compliance, and it is cheaper by a wide margin. The ₦100,000 + ₦50,000/month filing penalty, the automatic surcharges on late payment, the 40% penalty for failing to deduct WHT, the ₦5 million fine for engaging unregistered contractors, and the personal liability of directors — all of these create a system where the cost of getting it wrong escalates rapidly and relentlessly.

The good news is that every penalty on this list is avoidable with basic compliance hygiene: file on time, pay on time, keep records, use accredited agents, and verify your suppliers. Build a calendar, set reminders, and automate what you can. The investment in compliance is a fraction of the cost of a single penalty notice.

Use our PAYE Calculator and CIT Calculator to verify your figures before filing. Explore the full calculator suite for VAT, WHT, and other taxes. For complex compliance situations — multiple missed returns, disputed assessments, or potential criminal exposure — engage a specialist from our Tax Professional Directory immediately. And for the latest enforcement notices and compliance guidance from the NRS, bookmark nrs.gov.ng.

FAQs About NTA 2025 Penalties for Late Filing

What is the penalty for filing a late CIT return?

Under Section 101 of the NTAA 2025, the penalty is ₦100,000 for the first month of default and ₦50,000 for each subsequent month. This applies regardless of whether any tax is owed — even companies with 0% CIT liability face the penalty if they file late.

Is the filing penalty separate from the late payment penalty?

Yes. Filing and payment are separate obligations with separate consequences. The Section 101 penalty applies to late filing. The Section 142 surcharge applies to late payment. If you file late and pay late, you face both. Filing on time but paying late avoids the filing penalty and reduces your total exposure.

Can company directors be personally liable for tax penalties?

Yes. Section 161 of the NTAA allows personal liability of company directors and officers for wilful or negligent tax breaches. If a company’s non-compliance results from the director’s action or negligence, the director can be held personally responsible for the company’s tax debt and penalties.

What happens if I deduct WHT but do not remit it?

This is one of the most severely penalised offences. Under Section 107, you face the full amount owed plus 10% per annum plus interest at the CBN rate. Criminal prosecution can result in imprisonment of up to three years. Tax deducted at source is treated as trust money — failing to remit it is treated as misappropriation.

Can I negotiate a reduction in penalties with the NRS?

The NTAA provides for objections, reviews, and appeals. You can request clarification, apply for review (at the NRS’s discretion), object within 30 days, or appeal to the Tax Appeal Tribunal (with a 50% deposit of the disputed amount). The NRS has discretion to waive or reduce penalties in appropriate circumstances, but this is not automatic — you must engage proactively with supporting documentation.

Does the NRS really close business premises for non-compliance?

Yes. Section 159(3) of the NTAA authorises temporary closure of non-compliant business premises. This power was previously limited to extreme cases but now applies more broadly. It is typically used against persistently non-compliant businesses that have ignored multiple notices and enforcement steps.

What is the penalty for engaging an unregistered contractor?

₦5,000,000 under Section 100(2) of the NTAA. The penalty falls on the person or entity that awarded the contract — not on the unregistered contractor. This makes TIN verification during vendor onboarding a critical compliance step. Verify supplier TINs at taxid.nrs.gov.ng before processing any contract or payment.