Nigeria Links Late Tax Interest to Borrowing Costs in 2026

The Federal Government of Nigeria has announced a new framework for interest charges on late tax payments, effective October 1, 2026. The Minister of Finance and Coordinating Minister of the Economy, Taiwo Oyedele, stated that interest on naira-denominated tax debts will now be calculated at the Central Bank of Nigeria’s Monetary Policy Rate plus one percentage point, with a minimum rate tied to the yield on 364-day Treasury Bills.

This change aims to address the issue of delayed tax payments, which can force the government to borrow to cover revenue shortfalls. The new order, issued under Section 65 of the Nigeria Tax Administration Act, 2025, will apply uniformly across federal, state, and Federal Capital Territory tax authorities.

For foreign currency tax payments, interest will be based on the Secured Overnight Financing Rate plus six percentage points. The Nigeria Revenue Service is tasked with publishing the applicable rates monthly, ensuring taxpayers have clarity on the financial implications of late payments.