Welcome to the October 2026 edition of the Segun Awosanya & Co. (SAC) Newsletter.
Two Rate Cuts. One ₦12 Million Trap: What Nigeria’s New Late-Tax Interest Rate Means for Your Business
Nigeria’s changing interest-rate environment presents businesses with a significant development: interest on late tax payments has been reduced, but the 10% late-payment penalty remains unchanged.
What does this mean for businesses, entrepreneurs and taxpayers managing outstanding tax liabilities?
In its October 2026 Tax & Rates Alert, Segun Awosanya & Co. (SAC) examines the implications of the Central Bank of Nigeria’s Monetary Policy Rate (MPR) reduction and the new framework for calculating interest on late tax payments, effective 1 October 2026.
IN THIS EDITION · TWO RATE CUTS. ONE N12 MILLION TRAP.
The ₦12 Million Trap: Why the Numbers Matter
A lower interest rate does not necessarily translate into a small tax bill.
SAC’s analysis illustrates how a ₦100 million outstanding naira tax liability could attract substantial additional costs when payment is delayed. Under the assumptions used in the newsletter, a one-month delay could result in a combined cost of approximately ₦12 million when interest and the 10% penalty are considered.
The key takeaway is clear: businesses should not mistake reduced interest for relief from the financial consequences of late tax payment.
What Has Changed?
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The October alert examines two significant rate developments:
The CBN’s Monetary Policy Rate: The benchmark rate was reduced from 26.5% to 23% on 22 September 2026. - Interest on late tax payments: The new framework reduces the margin applied to the MPR for naira tax, from MPR + 5 percentage points to MPR + 1 percentage point, subject to the applicable minimum-rate provision.
However, the 10% late-payment penalty remains unchanged in SAC’s analysis. The newsletter also highlights important considerations around monthly rate resets, outstanding tax debts, disputed assessments, State and FCT taxes, and foreign-currency tax liabilities.
Read the full October 2026 Tax & Rates Alert
How much could the changes mean for your organisation? What assumptions underpin the calculations? Which issues deserve attention before you act?
SAC’s October 2026 Tax & Rates Alert provides a detailed analysis, illustrative calculations, key watchpoints and a practical action plan ahead of the November Monetary Policy Committee meeting.
