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Calculate penalties, interest, and surcharges for late tax filing or late payment under the Nigeria Tax Act 2025. Includes CIT, PAYE, VAT, and WHT penalties.
Penalty Details
Tax Penalties Under the NTA 2025
The NTA 2025 significantly strengthened penalty provisions for tax non-compliance. Late filing, late payment, under-declaration, and failure to deduct WHT all attract specific penalties and interest charges. Interest runs at the Central Bank of Nigeria Monetary Policy Rate (MPR), currently 27.50%, calculated on a daily basis from the due date until payment.
Late Filing Penalties
Failure to file a tax return by the due date attracts a penalty of 10% of the tax due, plus interest at the MPR from the filing deadline until the actual filing date. For companies, the CIT return is due within 6 months of the financial year-end. For individuals, the deadline is 31 March of the following year. VAT returns are due by the 21st of the following month.
Late Payment Penalties
Late payment of assessed tax attracts 10% of the unpaid amount plus interest at the MPR calculated daily. This applies to CIT, PAYE, VAT, and WHT. For PAYE, employers must remit deductions within 10 days of the month following deduction. For WHT, remittance is due within 30 days of deduction.
Criminal Penalties
Serious or repeated non-compliance can lead to criminal prosecution. Tax evasion (willful fraud or falsification) carries penalties of up to ₦10 million and/or 5 years imprisonment. Aiding and abetting tax evasion carries similar penalties. The NRS has expanded its investigation and enforcement capabilities under the NTA 2025.
Penalty and Interest Rates Summary
Frequently Asked Questions About Tax Penalties and Surcharges
The NRS has discretion to waive or reduce penalties in certain circumstances, such as genuine financial hardship, voluntary disclosure of errors, or where the delay was caused by circumstances beyond your control. Apply in writing to the NRS with supporting documentation.
Yes. Interest under the NTA 2025 is calculated at the CBN Monetary Policy Rate divided by 365, applied daily to the outstanding amount. At the current rate of 27.50%, a ₦1 million debt accumulates roughly ₦753 in interest every single day.
If a payer fails to deduct WHT from a qualifying payment, they become personally liable for the tax that should have been deducted, plus the standard 10% late payment penalty and daily interest. Repeated non-compliance can result in criminal prosecution.
Yes. Filing a return that understates your VAT liability attracts a penalty equal to the understated amount plus interest. Deliberately false claims (such as inflated input VAT) attract a 100% penalty plus full repayment of any refund claimed.
Interest begins accruing from the day after the tax was due. For CIT: 6 months after your financial year-end. For monthly VAT returns: the 21st of the following month. For PAYE employer remittance: 10 days after the month of deduction.
There is no statutory cap on interest — it continues to accrue until the full amount is paid. However, the 10% late filing penalty and 10% late payment penalty are each applied once (they do not compound). Criminal fines are capped at ₦10 million.
Yes. The NRS allows taxpayers to apply for instalment payment arrangements. You must demonstrate inability to pay the full amount at once and propose a realistic repayment schedule. Interest continues to accrue on the unpaid balance during the instalment period.
Common triggers include: significant discrepancies between filed returns and third-party data (bank records, WHT certificates), failure to file returns for multiple periods, unusually low tax payments relative to industry peers, tip-offs from whistleblowers, or random selection during compliance drives.
Yes. Employers who fail to deduct or remit PAYE face the standard penalties (10% + interest). Additionally, directors of companies that persistently fail to comply can be held personally liable and may face criminal prosecution under the NTA 2025.
VAIDS was a limited-time amnesty programme that allowed taxpayers to voluntarily declare previously undisclosed income and assets in exchange for penalty waivers. While the original VAIDS window has closed, the NRS occasionally announces similar voluntary disclosure windows.
Payments are made through the NRS e-payment platform using Remita or at any designated bank. Generate a payment reference from the NRS Self-Service Portal, then complete the payment through your bank or online banking. Keep the payment receipt for your records.
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