FG Introduces New Interest Rate for Late Tax Payments
The Federal Government has introduced a new interest-rate regime for taxpayers who fail to pay their tax liabilities on time, with the revised framework taking effect from October 1, 2026.
The Federal Ministry of Finance said the new regime is contained in the Nigeria Tax Administration (Interest on Late Payment of Tax) Order, 2026, issued under the Nigeria Tax Administration Act, 2025.
How the New Tax Interest Rate Works
Under the new framework, interest on late tax payments made in naira will be linked to the Central Bank of Nigeria’s Monetary Policy Rate plus one percentage point. However, the rate will not fall below the yield on 364-day Nigerian Treasury Bills.
The new structure replaces the previous five-percentage-point spread and is intended to make the cost of late payment more closely connected to prevailing market conditions.
The ministry said the framework will apply uniformly across Federal, State and Federal Capital Territory tax authorities.
Another feature of the new arrangement is that the applicable rate will be published regularly, giving taxpayers clearer information about the interest that may apply when tax liabilities remain unpaid.
The government said the change is part of efforts to make tax administration more predictable while ensuring that delaying payment of tax does not become cheaper than obtaining legitimate financing.
The new interest regime does not mean taxpayers can delay their obligations without consequences. Applicable tax penalties and other provisions of the tax administration framework will continue to apply.
Businesses and individuals with outstanding tax obligations will therefore need to pay attention to the new rules from October 1 and understand how the applicable interest is calculated.
