Federal Government Exempts Farmers and Small Businesses from Withholding Tax
The Federal Government has introduced a new withholding tax policy that exempts farmers, small businesses, and manufacturers. This announcement was made by Taiwo Oyedele, Chairman of the Presidential Committee on Fiscal Policy and Tax Reforms.
In a recent post on his social media, Oyedele outlined the key changes in the new policy:
- Exemption for Small Businesses: Small businesses are now exempt from withholding tax compliance, easing their tax burden.
- Reduced Rates for Low-Margin Businesses: Businesses operating with low profit margins will benefit from reduced withholding tax rates.
- Exemptions for Manufacturers and Farmers: Manufacturers and producers, including farmers, are now exempt from withholding tax.
- Measures to Curb Evasion and Minimize Avoidance: New measures are in place to reduce tax evasion and minimize tax avoidance.
- Ease of Obtaining Tax Credits: The new policy simplifies the process of obtaining tax credits and using tax deductions at the source.
These reforms are part of broader fiscal policy and tax reforms aimed at addressing longstanding challenges. The changes will reflect emerging issues and adopt global best practices, providing clear guidelines on the timing of deductions and key definitions. The approved regulation will be published in the official gazette soon.
Withholding tax was first introduced in Nigeria in 1977 as an advance payment of income tax on specified transactions. It was designed to ensure regular government revenue and curb tax evasion.
For more details, you can check out Taiwo Oyedele’s announcement on his social media handle.
