The Federal Government has announced a reduction in the interest charged on late payment of taxes, with the new regime set to take effect from October 1, 2026.
Under the new framework, interest on naira-denominated tax debts will be linked to the Central Bank of Nigeria’s Monetary Policy Rate, with an additional one percentage point. The rate will also be subject to a minimum benchmark tied to the yield on 364-day Treasury Bills.
The policy was introduced through the Nigeria Tax Administration (Interest on Late Payment of Tax) Order, 2026, issued by the Minister of Finance and Coordinating Minister of the Economy, Taiwo Oyedele.
The Federal Government said the revised approach is intended to provide a clearer and more responsive framework for calculating interest on outstanding tax liabilities.
The change comes as Nigeria continues to implement its broader tax reforms, with authorities seeking to improve tax administration while making the system more predictable for taxpayers and businesses.
Under the new arrangement, the amount charged on overdue tax liabilities will move with prevailing monetary and government securities rates rather than remaining disconnected from changing financial conditions.
The development is expected to affect businesses and individuals with outstanding tax obligations from October 1, when the new rules officially come into force.
