ABUJA, Nigeria — Taxpayers who fail to pay their liabilities by the required deadlines will face interest linked to prevailing market rates from October 1, 2026, under a new order issued by the Federal Government of Nigeria.
Kanyi Daily reports that the Minister of Finance and Coordinating Minister of the Economy, Taiwo Oyedele, issued the Nigeria Tax Administration (Interest on Late Payment of Tax) Order, 2026, pursuant to Section 65 of the Nigeria Tax Administration Act, 2025.
For tax liabilities payable in naira, the interest rate will be based on the Central Bank of Nigeria Monetary Policy Rate plus one percentage point, subject to a floor equivalent to the yield on 364-day Treasury Bills. The Federal Ministry of Finance said the new margin is lower than the five percentage points previously applicable.
For foreign currency tax liabilities, the interest rate will be based on the Secured Overnight Financing Rate (SOFR) plus six percentage points. An official successor benchmark will apply if SOFR is discontinued.
Explaining the policy, Oyedele said, “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. 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 new framework will use one applicable interest rate for each calendar month, based on the relevant benchmark on the last business day of the preceding month. The Nigeria Revenue Service (NRS) will publish the applicable rates on its website by the third business day of each month, while interest will accrue daily on a simple-interest basis from the date the tax becomes due until payment.
The rates will apply to both self-assessment and assessments administered by the NRS, state revenue services and the Federal Capital Territory (FCT) revenue authority. Oyedele said the uniform system would allow taxpayers across different jurisdictions to know the applicable rate in advance.
“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,” he said. “Clear rules make compliance easier and support a fair, predictable tax system.”
The existing 10% late-payment penalty under Section 65 of the Nigeria Tax Administration Act remains in place. Taxpayers in default may therefore face both the penalty and market-linked interest, while tax authorities retain the power under Section 66 to waive penalties or interest where good cause is established.
The new interest rates will apply to interest arising from October 1, 2026, including on taxes that became due before that date. Interest accrued before October 1 will remain governed by the rules applicable when it arose. The order also supersedes the 2017 notice and other previous notices on interest charged on unpaid taxes.
