Offences and penalties for breach of tax obligations
Late Filing of Tax Returns
(a) Every employer of labour must file tax returns by January 31 of every year. Failure to do so attracts a fine of N500,000 for a corporate employer and N50,000 for an individual upon conviction.(.S. 81 PITA) .
(b) Self employed individual who earns more than N30,000 in an assessment year must file tax returns of his global income from all sources on a previous year basis within the first 90 days of the year and assess himself to tax. (S 41, 43 and 44 PITA). Failure to file returns is an offence and is punishable with a fine of N5,000 on conviction with an additional payment of N100 for every additional day of default. Default to pay the fine attracts imprisonment of six months.
Assessment year means January 1 to December 31 of a given year.
Making incorrect returns
A person who gives false returns without reasonable excuse is guilty of an offence and liable to a fine of N20, 000 and double the amount of tax undercharged or would have been. (S.95 PITA).
False statements and returns
It is an offence to make a false statement for the purpose of obtaining any form of relief from tax payment. It is also an offence to procure, aid or abet or counsel any person to make a false report, keep a false account or unlawfully refuse or neglect to pay tax. This offence is punishable on conviction with a fine of N50,000 for an individual and N500,000 for a corporate body or to imprisonment for not more than six months. Where an offence under this section is committed by a person in relation to tax payable or repayable for an assessment year, it is punishable with a fine of N10,000 or treble the amount of tax chargeable for that assessment year, whichever is greater. (S. 96 PITA).
Failure to deduct Withholding tax
It is an offence for any person or corporate body to not deduct or after deduction not remit withholding tax within thirty days of deduction. This is punishable by a fine of 10% of the amount of tax due plus the value of the amount deducted or deductible with interest at the prevailing monetary rate of the CBN. (S. 74 PITA).
Failure to deduct tax at source when so requested
It is an offence to not deduct tax from any payment to any person when the tax authority so directs. The same sanction, as for failure to deduct withholding tax applies by virtue of the further amendment to PITA by the Finance Act 2019; fine of 10% of the amount of tax due plus the value of the amount deducted or deductible with interest at the prevailing monetary rate of the CBN.
Failure to deduct and remit PAYE
Every employer who fails to deduct and remit deductions to the tax authority within the first ten days of the new month after the month of deduction shall be liable to payment of 10% penalty per annum and interest at the prevailing commercial bank rate. The revenue authority may levy a distress on the premises/property of the employer or initiate a debt recovery action in court. (S. 82 PITA).
Late payment of income tax
This is also an offence and attracts a penalty of 10% per annum and interest at the prevailing bank rate. (S.76 PITA).
Obstruction of a tax officer is an offence
It is an offence of obstruction to willfully neglect or refuse to give information or to attempt or mislead a tax officer in the performance of his duties. This is punishable with a fine of N5,000 on conviction with an additional payment of N100 for every additional day of default. Default to pay the fine attracts imprisonment of six months. (S. 105 PITA). Physical aggression against a tax officer in the course of his duty is assault under the criminal code and is punishable with a jail term of seven years.( S.353 Criminal Code Act)
Tax evasion
This is a crime and may not merely consist of failure to pay tax but also willful underpayment or other unlawful act aimed at underpaying or not paying at all and is punished in the various forms in which it manifests. Tax evasion may also be punished as an economic and financial crime as well as under the criminal code law of Ogun State.
S. 94 as an omnibus section punishes offences for which there is no specific punishment.
Where there is no specific punishment provided, an offence is punishable with a fine of N5,000 on conviction, with an additional payment of N100 for every additional day of default if same is in respect of failure to file returns or keep proper account. Default to pay the fine attracts imprisonment of six months.
Tax payable notwithstanding proceedings
The institution of proceedings for the imposition of a penalty, fine or term of imprisonment under PITA does not relieve a person from liability to payment of any tax for which he may be liable.