Nigeria to reduce interest rates on late tax payments

The Nigerian Federal Government has introduced a new framework for calculating interest on late tax payments, set to take effect on October 1, 2026. Issued by Finance Minister Taiwo Oyedele under the Nigeria Tax Administration Act of 2025, the order aims to link the cost of delayed tax payments more closely to market conditions.

For tax liabilities payable in naira, the interest rate will be the Central Bank of Nigeria’s Monetary Policy Rate (MPR) plus one percentage point. This reduces the previous margin of five percentage points. However, the rate will not fall below the yield on 364-day Treasury Bills. For taxes payable in foreign currencies, the interest will be based on the Secured Overnight Financing Rate (SOFR) plus six percentage points.

The new rules apply uniformly across federal, state, and Federal Capital Territory revenue authorities. The Nigeria Revenue Service (NRS) will publish applicable monthly rates on its website by the third business day of each month. The government stated that this change ensures delaying tax payments does not become a cheaper form of credit than market borrowing.

Separately, the Executive Chairman of the NRS, Dr. Zacch Adedeji, unveiled a new institutional tagline, ‘Inspiring Trust, Sustaining Growth,’ as part of an effort to improve taxpayer confidence and support Nigeria’s goal of building a $1 trillion economy by 2030.