The Federal Tax Service (FIRS) has announced, on Tuesday, October 28, 2025, the establishment of a restraint at the source of 10% on interest from short-term securities.

FIRS from Nigeria announced that banks, stockbrokers and other financial institutions must now apply a 10% withholding tax on interest received on short-term securities such as treasury bills, corporate bonds, promissory notes and bills of exchange.

The new restraint at the source of 10% on short-term securities testifies to the efforts made by Nigeria to expand its non-oil revenue base in a context of fiscal pressures and an increase in public debt. Although it is expanding the fiscal net, the measure could reduce the appetite for instruments to short-term which have been a key liquidity channel for banks, funds pension companies and retail investors. Analysts expect a temporary drop in trading volumes and an adjustment in returns on the rise, with investors reassessing the risk after the removal of tax exemption. Maintaining the exemption for the obligations of Federal government suggests a strategy to guide investors towards sovereign instruments while taxing more aggressively private and sub-sovereign issuers