Taiwo Oyedele, the Chairman of the Presidential Committee on Fiscal Policy and Tax Reforms, has announced that the Federal Government has waived withholding tax for farmers, small businesses, and manufacturers.
Oyedele disclosed this in a post on his X (Twitter) handle, stating “As part of the ongoing fiscal policy and tax reforms, a new withholding tax regime has been approved.”
He continued: “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 minimize tax avoidance and the ease of obtaining credit and utilization of tax deducted at source.”
The tax expert reiterated that Withholding tax was introduced into the Nigeria tax system in 1977 to serve as an advance payment of income tax on specified transactions.
“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.”
“It was designed to provide the government with regular revenue flow and to serve as a means of curbing tax evasion,” Oyedele said.
The withholding tax exemption is part of the government’s broader efforts to support key economic sectors and ease the tax burden on small and medium enterprises (SMEs) in the country.
