The Nigeria Tax Administration Act imposes a clear duty on taxpayers to provide accurate and complete information when filing returns, responding to inquiries, or making declarations to tax authorities. Untrue declarations—whether deliberate or arising from negligence—can trigger significant sanctions.
Under Nigerian tax law, a taxpayer who makes a false statement or submits an incorrect return may face administrative penalties, back-duty assessments covering several years, and interest on unpaid liabilities. In more serious cases, the law provides for criminal prosecution, which can result in fines, imprisonment, or both.
Tax authorities have broad powers to audit and investigate declarations. Where discrepancies are uncovered, the burden often shifts to the taxpayer to demonstrate that the error was not willful. This can be a difficult standard to meet, particularly where records are incomplete or unavailable.
Beyond legal penalties, untrue declarations can damage a taxpayer's standing with regulatory bodies. A history of non-compliance may invite heightened scrutiny on future filings, complicate applications for tax clearance certificates, and affect participation in government contracts or concessionary arrangements.
The cost of correcting an untrue declaration frequently exceeds the tax that would have been payable had the correct position been declared from the outset. Professional advice and robust internal controls remain the most effective safeguards against inadvertent errors that could be construed as untrue declarations.
