The Federal Inland Revenue Service (FIRS) has notified taxpayers that the new gazette withholding tax regime will begin to take effect from the 1st of January 2025.
In a notice signed by the Executive Chairman of the FIRS, Zacch Adedeji, the service noted that the current withholding tax regime as provided in the Company Income Tax (CIT) regulation would continue to remain in force until December 25th 2024.
It further encouraged citizens to comply with regulations concerning tax payments.
According to the notice, “The Federal Inland Revenue Service (“the Service”) hereby notifies taxpayers, tax practitioners, and the general public as follows: 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.I.10 of 1997) and relevant WHT provisions remains in force up to and until 31st December 2024.”
Yesterday, the Federal government officially gazetted the new withholding tax regulation titled; The Deduction of Tax at Source (Withholding) Regulations, 2024. The new withholding tax regime seeks to repeal major provisions of the former withholding tax regulation which was approved as far back as 1978.
The Chairman of the Presidential Committee on Fiscal Policy and Tax Reforms stated earlier in June that the federal government had approved a new withholding tax regime for the country, which is awaiting an official gazette.
The earlier withholding tax system, established in 1978, faced challenges such as ambiguity due to the expanded scope of transactions, leading to increased taxes, inequities in the system, and strain on the working capital of low-margin businesses.
