By Jemimah Wellington, JKNewsMedia Correspondent
ADMINISTRATIVE PENALTIES under Nigeria’s tax framework now impose a N5,000,000 sanction on companies and statutory bodies that award contracts to persons who are not registered for tax.
The measure is contained in the Nigeria Tax Administration Act (NTAA), which sets out penalties for different forms of tax non-compliance by individuals and organisations.
It provides that any statutory body or company that awards a contract to an unregistered person is liable to pay the N5,000,000 administrative penalty as part of efforts to enforce compliance with tax registration requirements.
For individuals, failure or refusal to register for tax attracts a penalty of N50,000 in the first month of default as this increases by an additional N25,000 for each subsequent month that the failure continues.
The Act also prescribes sanctions for failure to file tax returns or for knowingly submitting incomplete or inaccurate returns.
It also notes that offenders are liable to a penalty of N100,000 in the first month of default, with an extra N50,000 charged for every additional month the failure persists.
Also, provisions on access to tax technology state that a person who refuses to grant the relevant tax authority access to deploy technology, after 30 days of receiving notice, will be liable to a N1,000,000 penalty on the first day of default.
An additional N10,000 applies for each day the default continues.
Sanctions are also set for non-compliance with fiscalisation requirements showing that a taxable person who fails to process a taxable supply through the fiscalisation system is liable to an administrative penalty of N200,000.
In addition, the person must pay 100 percent of the tax due, along with interest calculated at the prevailing Central Bank of Nigeria Monetary Policy (CBNMP) rate per annum.
Further, the Act addresses obligations related to tax collection and withholding adding that any person required to collect, deduct or withhold tax under the relevant tax laws, who fails to do so, is liable to an administrative penalty amounting to 40 percent of the tax not deducted.
Warning that failure to comply with tax attribution requirements also attracts sanctions, the Act notes that any person required to make tax attribution but fails to do so, or who makes the attribution and fails to notify the relevant tax authority, is liable to a N1,000,000 penalty.
Beyond financial penalties, criminal consequences are also provided stating that any person convicted of any offence under these provisions is liable to imprisonment for a term not exceeding three years.
Alternatively, such a person may face a fine of not less than the principal amount due, plus a penalty of up to 50 percent of that sum, or both imprisonment and fine.
To be applied across multiple areas of tax compliance, the penalties, is says, includes registration, filing of returns, use of prescribed systems and cooperation with tax authorities.
Specific monetary sanctions are also assigned to each category of default, with higher penalties imposed where noncompliance continues over time.
