The Federal Government has issued a new order reducing the interest margin applied to unpaid naira-denominated taxes, with effect from October 1, 2026.
Under the Nigeria Tax Administration (Interest on Late Payment of Tax) Order, 2026, interest on naira tax liabilities will be charged at the Central Bank of Nigeria’s Monetary Policy Rate plus one percentage point.
That replaces the previous spread of five percentage points, although the applicable rate cannot fall below the yield on 364-day Treasury Bills.
For foreign-currency tax liabilities, interest will be based on the Secured Overnight Financing Rate plus six percentage points.
The order applies across federal, state and Federal Capital Territory tax authorities and is intended to create a uniform approach to late-payment interest.
Finance and Coordinating Economy Minister Taiwo Oyedele said the framework was designed to ensure that delaying tax payment did not become cheaper than borrowing in the financial market.
The Nigeria Revenue Service is expected to publish the applicable rates by the third business day of each month.
The order does not alter the existing 10 per cent late-payment penalty, while tax authorities retain power to waive interest or penalties where the law permits and good cause is shown.
Interest that accrued before October 1 will continue to be governed by the rules in force when it arose.
The ministry said the new order superseded earlier notices on the subject and urged taxpayers with outstanding liabilities to settle them or engage the relevant tax authority.
