Companies and statutory organisations that give contracts to unregistered people may risk an administrative penalty of N5 million under Nigerian tax legislation.

According to the terms of the Nigeria Tax Administration Act, a taxable person who fails or refuses to register for tax shall face a penalty of N50,000 in the first month of default and N25,000 in each successive month of failure.

“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 legislation also imposes penalties for failing to file tax returns or intentionally filing incomplete or incorrect forms.

Such offenders will pay N100,000 in the first month of default and N50,000 for each successive month if the failure continues.

According to the Act, anybody who refuses to provide the appropriate tax authority access to install technology after 30 days of receiving the notification would face a penalty of N1 million on the first day of default and N10,000 for each successive day the default persists.

“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 anybody who is obligated to make tax attribution but does not do so or fails to inform the competent tax authority after making the attribution.

The NTAA further said that anybody guilty of any of the offences listed in this section faces up to three years in jail, a fine of at least the main amount owed plus a penalty of up to fifty percent of the total, or both.