Nigeria Tax Administration Order 2026 Cuts Late Tax Payment Interest

The Federal Government has reduced the interest charged on late payment of taxes, with the new rates taking effect Oct. 1, 2026.

The Nigeria Tax Administration Order 2026, signed by Finance Minister and Coordinating Minister of the Economy Taiwo Oyedele, was issued under Section 65 of the Nigeria Tax Administration Act, 2025, according to the Federal Ministry of Finance.

Under the new order, interest on tax payable in naira will be charged at the Central Bank of Nigeria’s Monetary Policy Rate plus one percentage point.

This replaces the previous five-percentage-point spread.

However, the applicable rate will not fall below the yield on 364-day Treasury Bills, reflecting the government’s borrowing cost when tax payments are delayed.

For taxes payable in foreign currency, the interest rate will be based on the Secured Overnight Financing Rate, or SOFR, plus six percentage points. If SOFR is discontinued, its official successor will apply.

The Nigeria Revenue Service is required to publish the applicable rates on its website by the third business day of every month.

Oyedele said the measure would make the cost of delayed tax payments more closely reflect market conditions.

“Tax that is due belongs to the public. When it is paid late, Government may have to borrow to fill the gap, and the cost falls on everyone,” he said.

The minister added that the new system would also give taxpayers greater certainty about their liabilities.

“Every taxpayer, whether dealing with the Nigeria Revenue Service or a State revenue service, will know the rate in advance, see it published every month, and be charged in the same way,” Oyedele said.

The new rates will apply to interest arising from Oct. 1, including interest on tax that became due before that date. However, interest that accrued before Oct. 1 will remain governed by the rules applicable at the time.

The order supersedes the 2017 notice on interest on unpaid taxes and other earlier notices on the subject.

It does not alter the 10% penalty for late payment under Section 65 of the Act. Tax authorities may also waive penalties or interest where taxpayers demonstrate good cause, as provided under Section 66.

Oyedele urged taxpayers to file returns and pay their taxes on time, while advising those with outstanding liabilities to settle them promptly or engage the relevant tax authority.