Nigeria: New Withholding Tax Regulations Implemented in 2025; Key Highlights

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)

A Series of Tax Relief Part 2

Welcome to the second part of this series.

Last week, we looked at some of the tax reliefs that have made available by the federal government to taxpayers to cushion the effects of the COVID-19 pandemic. However, various state governments have also made some tax reliefs available to taxpayers. Some of these tax reliefs available in various states include:

The Lagos State Internal Revenue Service (LIRS) has made the following tax reliefs and palliatives for taxpayers in the State:

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Tax Audit??? No need to worry.

The Federal Inland Revenue Service (FIRS) has introduced measures to improve the tax audit experience for all taxpayers in the country.The New measure have reduced the tax audit cycle to 63 days from 90 days and cut out multiple tax audits by various tax authorities through an MoU signed with the Joint Tax Board (JTB)

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THE HARD WAY, THE ONLY WAY!

A Bird’s Eye View on the FIRS Suspension of Lien on Bank Accounts

About two weeks ago, a good number of corporate and individual business owners got the shock of their lives when most suddenly, they were served notices on their bank accounts. The accounts had been placed on a freeze on the instruction of the Federal Inland Revenue Service (FIRS) due to the lack of regularization of their tax status or some default on their part. Business owners had funds ranging from hundreds of thousands to millions and even billions stuck in their banks!

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