By Jelili Gbadamosi
The Federal Government has announced a reduction in the interest charged on overdue tax liabilities, with the new rates taking effect from October 1, 2026.
Under a new Order issued by Finance Minister and Coordinating Minister of the Economy, Taiwo Oyedele, interest on tax liabilities denominated in naira will now be calculated using the Central Bank’s Monetary Policy Rate plus one percentage point.
The new rate represents a reduction from the previous MPR-plus-five-percentage-point framework.
For tax obligations payable in foreign currencies, the applicable rate will be the Secured Overnight Financing Rate (SOFR) plus six percentage points.
The revised rates will apply uniformly to federal, state and Federal Capital Territory tax authorities.
Oyedele said the adjustment was designed to align the cost of delayed tax payments with prevailing market conditions and provide taxpayers with greater certainty over their liabilities.
He added that the framework is intended to ensure taxpayers do not find it financially cheaper to delay tax payments than to obtain funds through the market.
The Nigeria Revenue Service will be responsible for publishing the applicable rates monthly, no later than the third business day of each month.
The new regime is expected to take effect nationwide from October 1, 2026.
