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The short answer
Yes, for a South African tax resident. Residents are taxed on worldwide income, and PwC describes South Africa's annual interest exemption (R23,800 under 65, R34,500 from 65) as applying to local interest, so plan on Nigerian T-bill interest being taxable in full. Any Nigerian tax actually withheld can be claimed as a rebate, which PwC says is capped at the South African tax on that foreign income; the South Africa-Nigeria treaty caps Nigerian tax on interest at 7.5%.
Why it is taxable
The Budget 2026 Tax Guide states that residents are taxed on their worldwide income, with foreign taxes on foreign-sourced income generally credited. Interest earned in Nigeria by someone who is tax resident in South Africa is part of that income. If you are not sure you are resident, start with the SARS residence test.
The interest exemption question
South Africa exempts a slice of interest each year: R23,800 for people under 65 and R34,500 from 65, according to SARS's Budget 2026 FAQ. PwC's South Africa summary (reviewed 29 May 2026) describes this as an exemption on the first R23,800 of local interest. On that reading, interest from a Nigerian T-bill does not use the exemption and is taxable from the first rand. Ask a registered tax practitioner if your figures are large or your situation is unusual.
What counts as the interest on a T-bill
A T-bill pays no coupon. You buy it below face value and are repaid at face value; the difference is your return. Most people report that difference as interest when the bill matures. If you sell before maturity, part of the return may be treated differently. We did not find a SARS page specific to foreign discount instruments, so confirm the treatment with a tax practitioner. This is information, not tax advice.
Converting naira to rand for the return
SARS Interpretation Note 63 says foreign currency amounts are translated at the spot rate on the date they are received or accrue, and that individuals may instead elect the average exchange rate for the year, applied to all foreign amounts in that year. Keep the maturity advice showing the date and the naira amount.
The Nigerian side and the credit
| Point | What the sources say |
|---|---|
| Nigerian withholding tax on interest | 10% domestic rate (PwC Nigeria, reviewed 29 May 2026) |
| Treaty cap on interest | 7.5% under Article 11 of the South Africa-Nigeria agreement (in force 2008) |
| Claiming the treaty rate in Nigeria | FIRS circular 2022/15: certificate of residence from your home tax authority and other documents to the Nigerian tax authority |
| Relief in South Africa | Rebate for foreign tax paid, capped at the proportion of SA tax that relates to the foreign income (PwC; Article 22) |
| Whether Nigeria withholds on T-bills for you | Not confirmed on the pages we read; check your bank's maturity advice for any deduction |
Only tax actually paid and properly due can be credited. If your Nigerian bank deducted 10% where the treaty allows 7.5%, the extra is a matter to reclaim in Nigeria, not to credit in South Africa.
Worked example
Example only: Ngozi, 42, is tax resident in Johannesburg with a marginal rate of 31%. A ₦10,000,000 T-bill she bought for ₦8,600,000 matures, so her interest is ₦1,400,000. At an illustrative ₦85 per rand on the maturity date, that is R16,471.
- SA tax before credit: R16,471 × 31% = R5,106.
- If Nigerian tax of 7.5% was withheld: ₦105,000, or R1,235 at ₦85.
- Rebate: R1,235, which is less than the SA tax on that income, so it is allowed in full.
- SA tax payable on the interest after the rebate: R5,106 − R1,235 = R3,871.
Provisional tax and record keeping
SARS says anyone who receives income other than remuneration is a provisional taxpayer, with exclusions including interest below the R23,800 or R34,500 levels. If your Nigerian interest is above those levels, you may need to make provisional tax payments through the year, not just declare it on your annual return. Keep for each bill: the contract note, the maturity advice, any withholding tax deduction, and the rate you used to convert to rand. Dividends are handled differently; see Nigerian dividends and SARS. For the money route itself, see funding Nigerian T-bills from South Africa.
Common mistakes
- Netting the Nigerian tax off first. Declare the gross interest and claim the Nigerian tax as a rebate; do not declare only what arrived.
- Using the exemption twice. If you also earn interest in South Africa, the R23,800 or R34,500 exemption is used up by that local interest.
- Reporting only what you brought home. Interest is taxable when it accrues, whether you leave the naira in Nigeria, roll it into a new bill or transfer it.
- Mixing up the currency dates. Use one method for the whole year: the spot rate on each maturity date, or the average rate if you elect it.
- Forgetting rollovers. Each bill that matures and is reinvested is a separate amount of interest for that tax year.
If you only become or stop being SA tax resident part way through a year, the interest before and after that date may be treated differently. That situation is worth a conversation with a registered tax practitioner before you file.
Where Pryme fits
A Pryme account keeps naira, dollars, pounds and euros in one place, and a verifiable statement gives you a clean record of what arrived and when, which helps when you translate amounts for SARS.
Questions people ask
Is Nigerian T-bill interest taxable in South Africa?
For SA tax residents, yes. Residents are taxed on worldwide income.
Does the R23,800 interest exemption apply to Nigerian interest?
PwC describes the exemption as applying to local interest, so plan on Nigerian interest being taxable in full. Confirm with a tax practitioner.
Can I claim Nigerian withholding tax against my SARS bill?
Yes, as a rebate capped at the SA tax on that foreign income. The treaty caps Nigerian tax on interest at 7.5%.
Which exchange rate do I use for Nigerian interest?
The spot rate on the date the interest accrues, or the average rate for the year if you elect it, per SARS Interpretation Note 63.
Sources
- National Treasury / SARS: Budget 2026 Tax Guide · accessed Oct 2026
- PwC Worldwide Tax Summaries: South Africa, individual income determination (reviewed 29 May 2026) · accessed Oct 2026
- PwC Worldwide Tax Summaries: South Africa, foreign tax relief and tax treaties (reviewed 29 May 2026) · accessed Oct 2026
- SARS: South Africa-Nigeria double taxation agreement (GN 752, Gazette 31241, 22 Jul 2008) · accessed Oct 2026
- SARS: Interpretation Note 63 (Issue 2), translation of amounts in foreign currencies (12 Aug 2015) · accessed Oct 2026
- SARS: Provisional tax (updated 21 Aug 2026) · accessed Oct 2026
This article is general information, not financial, legal or tax advice. Products described are provided under the terms on this site and are subject to regulation and eligibility.