The Federal Government has granted exemptions from withholding tax to farmers, small businesses, and manufacturers.
This announcement comes from Taiwo Oyedele, Chairman of the Presidential Committee on Fiscal Policy and Tax Reforms, who mentioned on his social media platform that a new withholding tax regime has been approved as part of the ongoing fiscal policy and tax reforms.
“The key changes introduced are to address the identified challenges and specifically include the exemption of small businesses from withholding tax compliance; reduced rates for businesses with low margins; exemptions for manufacturers and producers such as farmers; measures to curb evasion and minimise tax avoidance and the ease of obtaining credit and utilisation of tax deducted at source.”
A SIMPLIFIED AND BUSINESS FRIENDLY WITHHOLDING TAX REGIME HAS BEEN APPROVED
Background
Withholding tax was introduced into the Nigeria tax system in 1977 to serve as an advance payment of income tax on specified transactions. It was designed to provide the government with… pic.twitter.com/vGdj7KTQux
— Taiwo Oyedele (@taiwoyedele) July 2, 2024
Others are, “Changes to reflect emerging issues and adopt global best practices and clarity on the timing of deduction and definition of key terms. The approved regulation is expected to be published in the official gazette in the coming days.”
He said withholding tax came into effect in Nigeria in 1977 and was meant to serve as an advance payment of tax on specified transactions.
“It was designed to provide the government with regular revenue flow and to serve as a means of curbing tax evasion,” the tax expert said.