FG Reduces Interest Rate For Late Payment of Tax From 1st October

By Micheal Chukwuebuka

The Federal Government has reduced the interest rate charged on late payment of tax.

In a new Order issued by the Minister of Finance and Coordinating Minister of the Economy, Taiwo Oyedele, interest on Naira tax liabilities will now be charged at the Central Bank’s Monetary Policy Rate plus one percentage point, down from five percentage points.

For taxes payable in foreign currency, the rate will be SOFR – the international dollar benchmark – plus six percentage points. The Order, which takes effect from October 1st, 2026, will apply uniformly across federal, state and FCT tax authorities.

According to the Minister, the move is to link the cost of late payment to market rates, provide certainty for taxpayers, and ensure that delaying tax does not become cheaper than borrowing from the market.

The Nigeria Revenue Service is to publish the applicable rates monthly by the third business day of every month.