The Federal Government has issued a new order requiring taxpayers who miss payment deadlines to pay interest linked to prevailing market rates, effective October 1, 2026. The Minister of Finance and Coordinating Minister of the Economy, Taiwo Oyedele, signed the Nigeria Tax Administration (Interest on Late Payment of Tax) Order, 2026, the Federal Ministry of Finance said on Thursday.
Issued pursuant to Section 65 of the Nigeria Tax Administration Act, 2025, the order introduces a market-linked framework for calculating interest on unpaid taxes across federal, state and Federal Capital Territory tax authorities.
For taxes payable in naira, the rate will be the Central Bank of Nigeria's Monetary Policy Rate plus one percentage point, subject to a floor equivalent to the yield on 364-day Treasury Bills. The ministry said the new margin is a reduction from the five percentage points that previously applied.
For foreign currency tax liabilities, interest will be charged at the Secured Overnight Financing Rate, an international benchmark for US dollar rates, plus six percentage points. An official successor rate will apply if SOFR is discontinued.
"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."
Under the framework, one rate will apply for each calendar month, based on the applicable benchmark on the last business day of the preceding month. The Nigeria Revenue Service has been directed to publish the applicable rates on its website by the third business day of each month.
Interest will be calculated on a simple daily basis from the date the tax becomes due until payment is made. The rates will apply to self-assessment obligations and to assessments administered by the Nigeria Revenue Service and the internal revenue services of states and the FCT.
"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. "Clear rules make compliance easier and support a fair, predictable tax system."
