October 1: Late Tax Payments to Come With Extra Charges for Businesses
Businesses and other taxpayers in Nigeria who fail to settle their tax obligations on time will face a 10 per cent one-off penalty, alongside daily interest on the outstanding amount from October 1, 2026.
The new rules are contained in the Nigeria Tax Administration (Interest on Late Payment of Tax) Order, 2026, signed by the Minister of Finance and Coordinating Minister of the Economy, Wale Edun, according to reports.
The order replaces the previous 2017 framework and changes how interest on overdue tax liabilities is calculated across federal, state and Federal Capital Territory revenue authorities.
Under the new arrangement, interest on unpaid naira-denominated taxes will be calculated at the Central Bank of Nigeria’s Monetary Policy Rate plus one percentage point. Interest will accrue daily as simple interest from the date payment becomes due until the outstanding tax is fully settled.
For example, a taxpayer owing ₦10 million would immediately incur a ₦1 million statutory penalty, in addition to the daily interest that would continue to accumulate until the debt is cleared.
For tax liabilities denominated in foreign currencies, the applicable interest rate will be based on the Secured Overnight Financing Rate plus six percentage points.
The new framework will apply to self-assessment taxpayers across the Nigeria Revenue Service, state internal revenue services and the FCT tax authority. The applicable interest rate will be determined and published monthly.
The government said the revised system is intended to make the cost of delaying tax payments more closely reflect the cost of government borrowing and encourage taxpayers to settle their obligations when due.
