Nigeria's Finance Minister Unveils New Tax Interest Rates

The federal government of Nigeria has introduced a new framework for calculating interest on late tax payments, effective from October 1, 2026. This framework is outlined in the Nigeria Tax Administration (Interest on Late Payment of Tax) Order, 2026, issued by Taiwo Oyedele, the Minister of Finance and Coordinating Minister of the Economy.

Interest on tax liabilities payable in naira will be calculated at the Central Bank of Nigeria's (CBN) Monetary Policy Rate (MPR) plus one percentage point, with a minimum rate set at the yield on 364-day Treasury Bills. For foreign currency liabilities, the interest will be based on the Secured Overnight Financing Rate (SOFR) plus six percentage points.

The new framework simplifies the calculation process, applying a single interest rate each month, published by the Nigeria Revenue Service by the third business day of each month. This change aims to provide greater certainty for taxpayers and address funding gaps caused by late tax payments.

The existing 10 percent penalty for late payments remains in effect.