The Nigerian Government has issued the Nigeria Tax Administration Order 2026, reducing the interest rate charged on late payment of taxes.
The Order, signed by the Minister of Finance and Coordinating Minister of the Economy, Taiwo Oyedele, takes effect from October 1, 2026.
According to a statement by the Federal Ministry of Finance, the Order applies when taxpayers fail to pay their taxes on time, as provided under Section 65 of the Nigeria Tax Administration Act, 2025.
The new rules link the cost of late tax payments more closely to prevailing market rates while providing taxpayers with greater certainty over the financial consequences of delayed payments.
What the new order provides
For taxes payable in naira, interest will be charged at the Central Bank of Nigeria’s Monetary Policy Rate plus one percentage point.
Oyedele said this represents a reduction from the previous five-percentage-point spread.
However, the applicable rate will not fall below the yield on 364-day Treasury Bills, reflecting the cost to the Nigerian Government of funding itself when tax payments are delayed.
For taxes payable in foreign currency, interest will be charged at the Secured Overnight Financing Rate, or SOFR, plus six percentage points.
If SOFR is discontinued, its official successor rate will apply.
Oyedele said the Nigeria Revenue Service had been directed to publish the applicable interest rates on its website by the third business day of every month.
The minister said the new arrangement would ensure that taxpayers could determine the cost of late payment in advance.
He 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.”
He added, “Just as important is certainty. 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. Clear rules make compliance easier and support a fair, predictable tax system.”
Transition and earlier notices
The new rates will apply to interest arising from October 1, 2026, including interest on taxes that became due before that date.
However, interest that arose before October 1 will not be affected where it is specifically provided for under the rules that were in force 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 per cent penalty for late payment provided under Section 65 of the Nigeria Tax Administration Act.
Tax authorities also retain the power under Section 66 of the Act to waive penalties or interest where good cause is shown.
Government advises taxpayers
Oyedele urged taxpayers to file their returns and pay applicable taxes on time.
He also advised taxpayers to check the monthly interest rates published by the Nigeria Revenue Service and encouraged those with outstanding tax liabilities to settle them promptly or engage the relevant tax authority.