Taxpayers in Nigeria are required by law to provide accurate and truthful declarations when filing returns and responding to inquiries from tax authorities. The Nigeria Tax Administration Act (NTAA) establishes the legal framework governing tax compliance, and making an untrue declaration under this Act carries significant consequences.
Under the NTAA, a false declaration occurs when a taxpayer knowingly or recklessly provides information that is incorrect, misleading, or incomplete. This can include understating income, overstating deductions, concealing assets, or submitting falsified records. The tax authority treats such acts as serious violations that undermine the integrity of the tax system.
The law provides for a range of sanctions against those who make untrue declarations. These can include administrative penalties, interest on unpaid tax liabilities, and in more severe cases, criminal prosecution. The specific penalties depend on the nature and gravity of the offence, as well as whether the false declaration was made deliberately or through negligence.
Beyond the immediate financial penalties, taxpayers who are found to have made untrue declarations face reputational damage that can affect their business relationships and access to credit. Tax authorities may also subject such taxpayers to enhanced scrutiny in future assessment periods, increasing the compliance burden.
The NTAA empowers the relevant tax authority to conduct investigations, audits, and inquiries to verify the accuracy of declarations made by taxpayers. Where discrepancies are identified, the taxpayer bears the burden of demonstrating that the error was not intentional.
Tax professionals advise that taxpayers should maintain thorough records, seek professional guidance when uncertain about disclosure requirements, and promptly correct any inadvertent errors in previous filings. Voluntary disclosure before detection by the tax authority may result in more lenient treatment than waiting for the authorities to uncover the discrepancy.
This article is based on the original piece published on Tax TV and has been rewritten for clarity and style.
