Nigeria Cuts Late Tax Interest to Central Bank Rate Plus 1 Point
Nigeria · FINANCE Key Facts —The context Nigeria, Africa’s most populous country, overhauled its tax laws in 2025 to raise more revenue outside oil. —What happened From 1 October 2026, late naira tax payments carry interest at the central bank’s policy rate plus 1 percentage point. —The benchmark The Central Bank of Nigeria cut that […] The post Nigeria Cuts Late Tax Interest to Central Bank Rate…
Nigeria is reducing its late tax interest rate to equal the central bank's policy rate plus 1 percentage point, effective October 1, 2026. This change cuts the previous 5 percentage point spread and maintains the 10 percent late payment penalty. The Nigeria Revenue Service (NRS) must publish the applicable rate on its website each month, and interest accrues daily as simple interest without compounding.
The Central Bank of Nigeria cut its Monetary Policy Rate from 26.5 percent to 23 percent on September 22, 2026, so the new regime starts just over a week later. The new rule applies to both naira and foreign-currency tax arrears, with the latter being charged at the 6 percentage point US dollar benchmark SOFR plus 1 percentage point.
Taxpayers with naira arrears benefit from the lower spread, and state and Federal Capital Territory tax authorities gain a uniform standard. Linking late-payment interest to market rates makes Nigeria's enforcement more predictable for investors and lenders, reflecting a wider financial trend across West Africa.
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