By Okoi Obono-Obla
I recently purchased a hard copy of the Nigeria Tax Reform Compendium, which comprises the Nigeria Tax Administration Act (NTAA), 2025 (Establishment) Act, and the 2025 Joint Revenue Board of Nigeria (Establishment) Act. As I browsed through its pages, I was particularly drawn to Section 129, Part XI of the NTAA, whose marginal note reads: “Late Payment of Tax.” I found this section instructive and realized how bold, innovative, progressive, and revolutionary the tax reform initiative of President Bola Ahmed Tinubu is. It holds the potential to catalyze fundamental social, political, legal, and economic transformation in Nigeria—nearly 65 years after independence. It is noteworthy that the government is taking steps to restructure the country in ways that many may not have anticipated.
Section 129, subsections (1)(a)(b)(c), (2)(a)(b), (3)(a)(b), and (4) of the NTAA provide:
(1) Where any tax, royalty, or remittance due from a company involved or engaged in upstream petroleum operations is not paid on the due date, it shall be treated as a debt, and:
– (a) A sum equal to 10% of the amount payable shall be added to the tax, royalty, or remittance due;
– (b) In the case of a foreign currency transaction, the amount due shall incur interest at the prevailing SOFR or any successor rate, plus 10%;
– (c) In the case of transactions in Naira, the amount due shall incur interest at 2% above the prevailing Central Bank Monetary Policy Rate.
(2) A penalty of ₦2,000,000 or its US Dollar equivalent shall apply for each day the failure to pay continues.
(3) Notwithstanding the provisions of subsections (1) and (2), the Service may, with the assistance of the Commission or Authority:
– (a) Distrain the licensee or lessee of its oil wells, crude oil, condensates, natural gas or natural gas liquids, petroleum products, engines, machinery, tools, implements, or other effects;
– (b) Cancel, revoke, seize, distrain, or dispose of the licenses or rights of the holder.
(4) For the purposes of this section, the interest shall be compound interest and shall apply to all tax debts that remain unpaid as of the commencement of this Act.
What particularly interests me about Section 129 of the NTAA is its treatment of companies involved in crude oil and gas exploration—entities that, over the years, have earned notoriety for their refusal, failure, and/or neglect to pay taxes, royalties, or remittances due to the Federal Government. This persistent evasion has resulted in the loss of substantial revenue that should rightly accrue to the country.
As Chairman of the Special Investigation Panel for the Recovery of Public Property from July 2017 to August 11, 2019, I became deeply aware of the magnitude of this issue. In my efforts to recover millions of dollars for Nigeria—lost due to the dereliction of duty by multinational and indigenous companies—I encountered a maelstrom of resistance. This resistance came not only from the companies themselves but also from their collaborators, patrons of corruption, and fifth columnists within the government. My work ultimately led to my suspension, a stark reminder of the entrenched interests that resist reform.
Section 129 of the NTAA marks a decisive shift. It criminalizes and renders recoverable any unpaid tax, royalty, or remittance owed to the government by oil companies. Its provisions are not merely punitive—they are restorative, aimed at reclaiming Nigeria’s rightful revenue and asserting the rule of law in a sector long plagued by impunity.
Conclusion:
The enactment of Section 129 is more than a legislative milestone—it is a moral and economic imperative. It signals a new era in Nigeria’s pursuit of tax justice, transparency, and accountability. If implemented with integrity and vigor, it could dismantle the entrenched culture of fiscal evasion in the extractive sector and restore public confidence in governance. For a nation striving to redefine its destiny, this reform is not just timely—it is transformative.
