From 1 October 2026, interest on late naira taxes in Nigeria will be the CBN Monetary Policy Rate plus 1 percentage point, down from 5 points, with the 364-day Treasury bill yield as a floor. The Minister of Finance, Taiwo Oyedele, issued the Tax Administration Order 2026 on 24 September under section 65 of the Nigeria Tax Administration Act 2025. With the MPR cut to 23% on 22 September, late naira tax now attracts interest of 24% a year. Taxes due in foreign currency carry SOFR plus 6 points. The 10% penalty for late payment is unchanged.

Much of the coverage has called the order relief for taxpayers. On the interest line, it is. For a finance team, the more useful question is what a late payment still costs, and the answer is a great deal.

Take a company that pays NGN 100m of company income tax 60 days late. The 10% penalty is NGN 10m. Interest at 24% for 60 days adds about NGN 3.95m. The total is close to NGN 14m, or 14% of the tax, for a delay of 2 months. Annualised, that is a cost of more than 80%. Few companies would borrow at that rate.

The order also has a wide reach. It applies to self-assessments and to assessments by the Nigeria Revenue Service and by state and FCT revenue services, so PAYE and withholding tax owed to LIRS sit under the same rule as company income tax owed to the NRS. Interest runs daily from the due date, and the new rate applies from 1 October even to older liabilities. The NRS will publish the rate by the 3rd business day of each month, so the cost of any arrears will now move with monetary policy.

This is where the trade-off becomes clear. A lower spread makes each extra month of delay a little cheaper. The flat penalty makes the first day of delay expensive. The design favours companies that pay on time, and companies that clear arrears quickly. A company that pays late by habit takes the full penalty each time and carries a liability whose rate it cannot predict.

In our work with mid-sized companies and foreign subsidiaries, late payment is rarely a deliberate funding decision. It usually comes from a tax calendar that misses obligations, a cash squeeze in the month a large payment falls due, or an assessment left in dispute without a formal objection. State taxes are often the weak point, because PAYE and withholding tax are handled by payroll and procurement teams with little tax review. Each can be fixed for far less than the penalties it creates.

Section 66 of the Act still allows the tax authority to waive penalty or interest where a taxpayer shows good cause. That is a safety net for real problems, such as a system failure, and it is only as strong as the records behind the request.

Compliance also pays in ways that do not appear in a tax computation. A clean record shortens tax audits, makes a tax clearance certificate easier to obtain, and gives lenders and investors less to question in due diligence.

What CFOs should check this month
1. Build or refresh a single tax calendar that covers every federal and state obligation, including PAYE, withholding tax and VAT, with a named owner and due date for each.
2. List every open liability and disputed assessment.

3. Settle what is due, file formal objections where you disagree, and recompute interest from 1 October at the new rate.
4. Set a monthly review that compares filings and payments with the calendar, and picks up the rate the NRS publishes each month for your accruals.

Two other things last week
The MPR cut. The MPC cut the rate by 350 basis points to 23% on 22 September and narrowed the corridor to +50/-300 basis points, while holding the CRR at 45%. The CBN described the move as a “reset” to align the MPR with market realities. The LCCI and MAN have both warned the cut may not reach borrowers, so ask your bank in writing when your facility pricing will be reviewed.

Oil above USD 100 a barrel. Brent closed at USD 104.32 a barrel on 25 September, held up by attacks on Saudi supply and the Strait of Hormuz disruption, while WTI fell on hopes of US-Iran talks. Dangote raised its petrol gantry price to NGN 1,350 a litre on 12 September, then cut it to NGN 1,325 about 9 days later as crude eased. That swing runs straight into generator, diesel and logistics budgets, so plan Q4 energy costs as a range with a clear high case.

To check where your company stands under the Tax Acts 2025, speak to MBR or use our free Tax Act checker at moorebr.com/tax-check