New tax law: Companies to face N5m penalty for contract awarded to unregistered persons

Companies and statutory bodies that award contracts to unregistered persons will face a N5 million administrative penalty under Nigeria’s tax law.

According to the provisions of the Nigeria Tax Administration Act, a taxable person who fails or refuses to register for tax will be liable to a penalty of N50,000 in the first month of default and N25,000 for each subsequent month the failure continues.

“A statutory body or company who awards a contract to an unregistered person, shall be liable to pay an administrative penalty of N5,000,000,” the Act said.

The law also prescribes penalties for failure to file tax returns or for knowingly filing incomplete or inaccurate returns.

Such offenders will pay N100,000 in the first month of default and N50,000 for each subsequent month the failure persists.

Under the Act, a person who refuses to grant the relevant tax authority access to deploy technology after 30 days of receipt of the notice will be liable to a penalty of N1 million on the first day of default and N10,000 for each additional day the default continues.

“A taxable person that fails to process a taxable supply through the fiscalisation system is liable to an administrative penalty of 200,000 plus 100% of the tax due and an interest at the prevailing Central Bank of Nigeria Monetary Policy rate per annum,” the law said.

“A person who has an obligation to collect, deduct or withhold tax under the relevant tax laws, and fails to collect, deduct or withhold the tax due is liable to an administrative penalty of 40% of the amount not deducted.”

The Act also imposes a N1 million penalty on any person required to make tax attribution who fails to do so or, having made the attribution, fails to notify the relevant tax authority.

The NTAA added that a person convicted of any of the offences under this section, shall be liable to a term of imprisonment not exceeding three years, or a fine of not less than the principal amount due plus penalty of not more than 50 percent of the sum, or both.(The Cable)