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In 2026, the Nigeria Revenue Service (NRS) has made one thing clear: Withholding Tax (WHT) compliance is no longer optional. Under the Nigeria Tax Administration Act 2025, the penalties for failing to deduct or remit WHT have been adjusted to discourage tax leakage. For business owners, these fines can be far more expensive than the tax itself.
The 40% Non-Deduction Penalty
One of the harshest changes in 2026 is the penalty for failing to deduct WHT from a vendor. If you pay a contractor the full invoice amount without deducting the applicable tax (usually 5% or 10%), the NRS can fine you 40% of the amount you failed to deduct. To get your math right, see How to Calculate WHT in Nigeria.
Late Remittance Fines
If you deduct the tax but fail to remit it by the 21st of the following month, you face:
- A flat 10% administrative penalty on the tax due.
- Interest at the CBN Monetary Policy Rate (MPR) plus 5%.
- Potential restriction of your Tax Clearance Certificate (TCC).
For a full list of deadlines, check our Tax Compliance Checklist. You can also read about General Tax Penalties in Nigeria. For official enforcement guidelines, visit the NRS website or PwC Nigeria.”