The Federal Inland Revenue Service, FIRS, says it would commence enforcement of the newly gazetted withholding tax regulations from January 1, 2025.
The new withholding tax regulations, which were published on Wednesday, are aimed at reducing rates and exempting small businesses with annual turnover not exceeding N25 million.
Executive Chairman of FIRS, Mr Zacchaeus Adedeji, in a statement on Thursday, said all extant laws pertaining to withholding tax remain active.
Withholding tax, WHT, is an advance payment of income tax collected on dividends, rent, consulting, and brokerage fees, among others.
Earlier on Wednesday, the Chairman of the Presidential Committee on Fiscal Policy and tax reforms, Taiwo 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.
But FIRS clarified that enforcement will commence on January 1, adding that 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,” the device said.
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.
