Implementation of tax deduction begins January — FIRS‬

‪Abdullateef Fowewe‬

‪The Federal Inland Revenue Service has confirmed the implementation of new withholding tax laws which grant rates reduction and full exemption from Withholding Tax to many businesses, including SMEs with annual turnover not exceeding N25 million, by January 1, 2025.

A remark on Thursday signed by the Executive Chairman of FIRS, Zacch Adedeji, encouraged taxpayers to continue to comply with their tax obligations in line with the extant laws.

The statement reads, “The Deduction of Tax at Source Withholding (WHT) Regulations, 2024 published in the Federal Government Gazette takes effect from 1st January 2025.

“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. Further enquiries on the above subject should be addressed to the: Director, Tax Policy & Advisory Department, Federal Inland Revenue Service,

26 Sokode Crescent, Wuse Zone 5, Abuja.”

Meanwhile, the goal of the regulation, according to the gazetted is to remove complexities in the deduction of tax at source; reduce the rates of the deduction for sectors with low margins; provide exemptions for small businesses and manufacturers; promote the ease of tax compliance and administration; curb tax evasion among others.