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The regulations grant rate reduction and full exemption from Withholding tax to many businesses, including SMEs with annual turnover not exceeding N25 million,” Mr Oyedele said.
The deduction of tax at source (Withholding) regulations, 2024, has been published in the official gazette, Taiwo Oyedele, the chairman of the presidential fiscal policy and tax reforms committee, has said.
Mr Oyedele disclosed this via his official X handle on Wednesday.
The official gazette of the Federal Republic of Nigeria is a publication that contains official texts of a legislative or administrative nature, including laws, decrees, and government notices.
“The Deduction of Tax at Source (Withholding) Regulations, 2024, has been published in the official gazette. The regulations grant rate reduction and full exemption from Withholding tax to many businesses, including SMEs with annual turnover not exceeding N25 million,” Mr Oyedele said.
He said the commencement date of the new regulations is 30 September, while implementation begins on 1 January 2025 to allow for a minimum of 90 days notice required for tax changes in line with the 2017 National Tax Policy.
However, he said, there is a provision permitting the Federal Inland Revenue Service (FIRS), with the approval of the Finance Minister, to issue guidelines for the implementation of the regulations and, where appropriate, permit early application of the Regulations from 1 July 2024.
“The essence of this provision is to enable persons who wish to adopt the regulations early to do so given that it is generally providing reliefs to businesses rather than imposing a burden,” he added.
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ALSO READ: Nigerian govt overhauls Withholding Tax, grants exemptions to farmers, SMEs
In July, Mr Oyedele announced that the federal government has approved a new, business-friendly withholding tax regime.
Announcing the approval at the time, he highlighted key changes designed to ease the compliance burden on businesses, particularly small and medium enterprises (SMEs) and farmers.
According to the Federal Inland Revenue Service (FIRS), Withholding Tax (WHT) serves as a prepayment of Income Tax, deducted at rates between 5 per cent and 10 per cent depending on the transaction.
Returns are due by the 21st of the next month, with late filings penalised at N25,000 for the first month and N5,000 for each subsequent month.
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