The Federal Government of Nigeria has announced the exemption of farmers, small businesses, and manufacturers from withholding tax, as part of its ongoing fiscal policy and tax reforms. This was disclosed by the Chairman of the Presidential Committee on Fiscal Policy and Tax Reforms, Taiwo Oyedele, on his social media handle.
The new withholding tax regime aims to address challenges in the tax system, including tax evasion and avoidance. The exemptions are expected to benefit small businesses, manufacturers, and producers, including farmers.
Withholding tax was introduced in Nigeria in 1977 as an advance payment of income tax on specified transactions. The government hopes to provide regular revenue flow and curb tax evasion.
The approved regulation is expected to be published in the official gazette soon. The changes aim to reflect emerging issues, adopt global best practices, and provide clarity on key terms.
