Nigerian taxpayers now have a fresh rule to watch closely, the Federal Government has introduced new interest charges for late tax payments.
This change takes effect starting October 1, 2026, it targets anyone who fails to pay their taxes on time.
The Minister of Finance, Taiwo Oyedele, signed off on this new tax late payment order, it falls under the Nigeria Tax Administration Act of 2025.
According to the order, interest on naira-based taxes will follow a new formula, it will be tied to the Central Bank’s Monetary Policy Rate plus one percent.
This new rate comes with a built-in floor as well, it cannot fall below the yield on 364-day Treasury Bills.
The ministry confirmed this marks a major drop from previous charges, the old rate stood much higher, at five percentage points.
For foreign currency tax debts, a different formula applies instead, interest will follow the Secured Overnight Financing Rate plus six percentage points.
This tax late payment order aims to reflect real market conditions, Oyedele explained the thinking behind the decision clearly.
“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.
He stressed that the goal is fairness, not punishment.
“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,” Oyedele said.
Rates will be reviewed monthly based on market conditions, the Nigeria Revenue Service will publish updated figures by each month’s third business day.
Interest will be calculated daily using a simple-interest method, the ministry clarified that the existing 10% late-payment penalty still applies alongside this new charge.
Oyedele emphasized that predictability remains central to the policy.
“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.
