FG Cuts Interest Rate for Late Payment of Tax from October 1
Ndubuisi Francis and James Emejo in Abuja The federal government yesterday issued the Nigeria Tax Administration (Interest on Late Payment of Tax) Order, 2026, which sets the applicable interest rate
The Nigeria government has reduced the interest rate on late payment of tax effective October 1, 2026. This new directive applies across federal, state, and FCT tax authorities. The Federal Ministry of Finance highlighted that the interest on late tax payments is now more closely tied to market rates, providing taxpayers with a clear understanding of costs and penalties for delayed payments.
The new rate for naira-denominated tax is set at the Central Bank of Nigeria’s Monetary Policy Rate plus one percentage point, down from the previous five percentage points. For foreign currency tax, the rate is the Secured Overnight Financing Rate (SOFR) plus six percentage points. The revised rates will be published monthly on the NRS website.
The government aims to enhance taxpayer confidence and improve revenue collection through this move, which aligns with the broader goal of building a $1 trillion economy by 2030.
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