The Nigerian Government has approved a new withholding tax regime as part of the ongoing fiscal policy and tax reforms.
The new withholding tax regime incorporates tax measures to curb tax evasion and minimize tax avoidance. It contains changes to reflect emerging issues and adopt global best practices.
The new withholding tax regime provides clarity on the timing of deduction and sets out definitions of key terms.
An exemption is provided for small businesses, manufacturers and producers such as farmers.
Withholding tax was introduced into the Nigeria tax system in 1977.
The new withholding tax regime will be gazetted soon.