Late Tax Payments to Attract New Interest Rates From October 1

The Federal Government has introduced new interest rates for late tax payments, with the changes taking effect on 1st October, 2026.

Under the Nigeria Tax Administration Order 2026, interest on unpaid taxes in naira will be linked to the Central Bank of Nigeria’s monetary policy rate, or MPR, plus 1 percentage point.

The new spread is lower than the previous five-percentage-point margin.

With the MPR currently at 23%, the interest rate on late naira tax payments will be 24%, subject to a floor based on the yield on 364-day Treasury bills.

For taxes payable in foreign currency, the rate will be the Secured Overnight Financing Rate, or SOFR, plus 6 percentage points.

The rates will be reviewed monthly and published by the Nigeria Revenue Service by the third business day of each month.

Finance Minister Taiwo Oyedele said the new system was designed to prevent taxpayers from using delayed tax payments as a cheaper form of borrowing.

“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,” Oyedele said.

“This Order ties the cost of late payment to real market rates, so that delaying tax does not become a cheaper form of credit than the market itself.”

The government said the 10% penalty for late payment remains unchanged under the Nigeria Tax Administration Act, 2025.

Interest accruing from 1st October will be subject to the new rates, including interest on tax liabilities that became due before that date.

However, interest that accrued before 1st October will remain governed by the rules applicable at the time.