FG cuts margin on interest for late taxes

The Federal Government of Nigeria has implemented a new framework for charging interest on late tax payments, effective October 1, 2026. The new order ties the interest rate to the Central Bank of Nigeria’s Monetary Policy Rate plus one percentage point, with a minimum rate linked to the yield on 364-day Treasury Bills. This change aims to reflect the cost of borrowing for the government when taxes are paid late, ensuring taxpayers face real market rates instead of a cheaper form of credit.

The Minister of Finance, Taiwo Oyedele, explained that this approach would prevent taxpayers from avoiding the true cost of delayed payments. The new rates will apply uniformly across federal, state, and Federal Capital Territory tax authorities, with a reduced additional margin for naira-denominated taxes from five percentage points to one percentage point.

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