The Federal Inland Revenue Service (FIRS) has notified taxpayers, and tax practitioners that the new gazetted withholding tax regulations will take effect from January 1, 2025.
The new withholding tax regulations were published by the federal government on Wednesday.
Withholding tax (WHT) is an advance payment of income tax collected on dividends, rent, consulting, and brokerage fees, amongst others.
The new withholding tax regulations seek to reduce rates and exempt small businesses with annual turnover not exceeding N25 million.
The clarification followed a statement by Taiwo Oyedele, chairman of the presidential committee on fiscal policy and tax reforms, on Wednesday, that the commencement date of the new regulations is September 30, 2024, while implementation begins on January 1, 2025, to allow for a minimum of 90 days’ notice required for tax changes in line with the 2017 National Tax Policy.
However, Oyedele said 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 July 1, 2024.
In a statement signed by Zacchaeus Adedeji, executive chairman of FIRS, on Thursday, the agency said all extant laws pertaining to withholding tax remain active.
According to the agency, taxpayers must oblige to the existing laws pending the implementation of the newly gazetted withholding tax regulations.
“The Deduction of Tax at Source Withholding (WHT) Regulations, 2024 published in the Federal Government Gazette takes effect from 1st January 2025,” FIRS said.
“The current WHT regime as enshrined in the Companies Income Tax (Rates, ETC, of Taxes Deducted at Source (Withholding Tax) Regulations (S.1.10 of 1997) and relevant WHT provisions remain in force up to and until 31st December 2024.
“Taxpayers are encouraged to continue to comply with their tax obligations in line with the extant laws.”
FIRS also urged the public to direct further enquiries on the above subject to the director, tax policy and advisory department of the service at 26 Sokode Crescent, Wuse Zone 5, Abuja.
The Cable
