The federal government has said that it has officially gazetted the Withholding Tax Regulations 2024, and the implementation of the tax regime will commence in January 2025.
This was disclosed on Wednesday in a post by the Chairman of the Presidential Fiscal Policy and Tax Reforms Committee, Taiwo Oyedele, seen by NewsNGR.
Oyedele said the Deduction of Tax at Source (Withholding) Regulations, 2024, has been published in the official gazette, adding that the regulations grant rates reduction and full exemption to many businesses.
He said, “The Regulations grant rates reduction and full exemption from Withholding Tax to many businesses, including SMEs with annual turnover not exceeding N25m.”
The committee chairman disclosed that the commencement date of the new regulations is 30th September 2024.
He noted that the implementation begins on 1st January 2025, adding that it would allow for a minimum of 90 days notice required for tax changes in line with the 2017 National Tax Policy.
He said, “However, there is a provision permitting the 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 1st 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. “
Checks by NewsNGR showed that some of the key changes introduced are to address the identified challenges like ambiguities regarding persons required to comply, eligible transactions and applicable rates among others.
However, some of the changes include the exemption of small businesses from Withholding Tax compliance and the reduced rates for businesses with low margins.
Others are, “Exemptions for manufacturers and producers such as farmers. Measures to curb evasion and minimise tax avoidance, the ease of obtaining credit, and utilisation of tax deducted at source
“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.”