A false statement made to tax authorities in Nigeria is no longer treated as a minor compliance slip. Under Section 124 of the Nigeria Tax Administration Act, 2025 (NTAA), an untrue declaration constitutes a grave tax offence that attracts financial penalties, criminal sanctions, and far-reaching reputational damage. The law reflects a deliberate shift in posture: dishonesty in tax matters is now regarded as a frontal assault on the integrity of the entire tax system, and the consequences are calibrated to match that severity.
The scope of what qualifies as an untrue declaration under Section 124 is deliberately broad. It extends well beyond the obvious case of a fabricated tax return. Any notice, certificate, or tax-related document that is made, signed, delivered, or caused to be delivered for tax purposes falls within the reach of the provision. Equally covered are untrue answers given verbally to tax officers during enquiries or audits. This means the risk is not confined to what a taxpayer puts in writing; it also attaches to what the taxpayer says when called upon to explain a filing position, a transaction, or a discrepancy. In practical terms, understating income, inflating deductions, omitting taxable earnings, or providing misleading responses during a tax review all place a taxpayer squarely within the danger zone.
The financial consequences are immediate and can be severe. Section 124 imposes an administrative penalty of ₦1,000,000 for making an untrue declaration. But the financial exposure does not stop there. The taxpayer remains liable for the tax that was undercharged or not charged as a result of the false statement, together with any unpaid amount or overpayment that flowed from it. The arithmetic is straightforward: a false declaration does not shrink a taxpayer's liability; it expands it. What may initially appear to be a shortcut to a lower tax burden can rapidly deteriorate into substantial financial losses, reputational harm, and, in extreme cases, foreclosure proceedings.
The NTAA further elevates the offence to a criminal matter. Upon conviction, a taxpayer faces an additional fine of ₦1,000,000, a term of imprisonment of up to three years, or both. The law thereby moves the issue out of the realm of routine compliance failure and into the territory of prosecution. Tax authorities are empowered to investigate suspected violations, engage law-enforcement agencies, and initiate criminal proceedings where an offence is established.
The risk of personal exposure also extends beyond the corporate veil. Where the offence is committed by a company, partnership, trust, or similar entity, directors, managers, partners, trustees, and other individuals involved in management may be held personally liable unless they can demonstrate that they had no knowledge of the offence and were not involved in its commission.
The practical dangers of an untrue declaration can be grouped into four categories: direct financial losses from penalties and unpaid tax, lasting damage to personal and corporate reputations, the threat of foreclosure and criminal conviction, and unnecessary physical exposure through arrest or detention. The safer and more prudent course for every taxpayer is not simply to file returns, but to file them truthfully, maintain proper records, and correct any errors at the earliest opportunity before they harden into prosecutable offences.
