Penalties are the most avoidable cost a company pays. Here's what late filing and late payment actually cost under the 2026 rules, and a simple routine to never pay them.
What is the penalty for filing late?
Under the Nigeria Tax Administration Act 2025 (NTAA), failing to file a return on time attracts an administrative penalty of:
- ₦100,000 for the first month of default, and
- ₦50,000 for each subsequent month (or part of a month) the return is outstanding.
Example: A company files its annual return 5 months late: ₦100,000 + (4 × ₦50,000) = ₦300,000, even if the tax due is small.
What is the penalty for paying late?
Late payment of tax due attracts:
- a penalty of 10% of the unpaid amount, plus
- interest at the Central Bank of Nigeria's monetary policy rate plus a spread, running until the tax is paid.
Example: ₦2,000,000 VAT paid two months late costs a ₦200,000 penalty plus two months of interest.
What about pension, PAYE and CAC?
| Obligation | Consequence of lateness |
|---|---|
| Pension remittance (due within 7 working days of pay day) | Penalty of at least 2% of the outstanding contribution per month under the Pension Reform Act 2014, plus PenCom recovery action |
| PAYE (due by the 10th to the State IRS) | State penalties and interest, and the amounts are employees' money held in trust |
| CAC annual returns | Late filing penalties, and under CAMA 2020 directors can be personally liable |
What else does non-compliance cost?
- No tax clearance certificate, which can cost you a government or corporate contract. See how to get a TCC.
- Audits and best-of-judgement assessments, where the tax authority estimates your liability if you don't file.
- Bank and vendor-registration friction, since more clients now check tax status.
How do I avoid penalties?
- Put every deadline in one calendar: PAYE on the 10th, VAT and WHT on the 21st, pension within 7 working days, annual returns within 6 months of year end. See the 2026 tax calendar.
- File even when you owe nothing. Nil VAT returns and 0% company returns still have to be filed.
- Set tax money aside when you get paid, not when it's due.
- Keep proof of every payment and remittance.
- If you're already late, file and pay now. Penalties and interest keep growing.
BizBooks builds your tax calendar from your invoices and payroll, shows what's due and how much, and turns items red when they're overdue. See tax tracking.
Frequently asked questions
What is the penalty for late filing of tax returns in Nigeria?
₦100,000 for the first month and ₦50,000 for each subsequent month under the Nigeria Tax Administration Act 2025.
What is the penalty for late payment of tax?
A 10% penalty on the unpaid amount plus interest based on the CBN monetary policy rate, until the tax is paid.
What happens if I remit pension late?
The Pension Reform Act 2014 imposes a penalty of at least 2% of the outstanding contribution for each month of default, and PenCom can take recovery action.
Do I get penalised for a late nil return?
Yes. The filing penalty applies to late returns even when no tax is due, so file nil returns on time.