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The Federal Government has exempted farmers, small businesses, and manufacturers from withholding tax, says the Chairman of the Presidential Committee on Fiscal Policy and Tax Reforms, Taiwo Oyedele.
In a post on his X handle, Oyedele said: “As part of the ongoing fiscal policy and tax reforms, a new withholding tax regime has been approved.
“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.
“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.”
Oyedele gave a perspective on withholding tax, explaining that it was introduced 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,” he said.
The new measure is seen as a fallout of the ongoing tax reforms aimed at giving a human face to taxation and encouraging business owners and individuals to voluntarily pay taxes.
