The significant Nigerian government changes to the country’s tax system with the implementation of the 2024 Withholding Tax Regulations seeks to improve tax compliance, reduce the burden on businesses, and align Nigeria’s tax policies with global best practices.

Key Features of the New Regulations:

• Exemption for Small Businesses: Small companies with an annual turnover below a specified threshold are no longer required to deduct tax at source, provided they meet compliance conditions such as having a valid Tax Identification Number (TIN).
• Reduced Rates for Low-Margin Sectors: The regulations introduce reduced withholding tax rates for sectors operating on low margins, such as agriculture and manufacturing.
• Exemptions for Key Sectors: Farmers, manufacturers, and other producers are now exempt from withholding tax, provided their activities fall under specified qualifying criteria.
• Measures to Curb Tax Evasion: Stricter compliance requirements for businesses without a valid TIN, with companies engaging in transactions without a TIN facing double the standard withholding tax rate.
• Simplification and Clarity: The regulations aim to address ambiguities in the application of withholding tax, providing clarity on critical aspects such as timing of deductions and scope of eligible transactions.

For expert guidance and support, please do not hesitate to reach out to our team (info@taxaide.com.ng)