The federal government has approved a new withholding tax regime for the country and introduced key changes to the previous tax regime such as reduction of rates for businesses with low margins and measures to curb evasion.
Chairman of the Presidential committee on fiscal policy and tax reforms, Taiwo Oyedele disclosed this on his official X handle where he stated that the gazette will be signed in the coming days.
According to him, the erstwhile withholding tax system introduced in 1978 had challenges such as the ambiguity necessitated by the increase in transactions that it covered thereby increasing the list of multiple taxes, inequity, straining the working capital of businesses with low margins etc.
Furthermore, he stated that key changes introduced to the rewritten withholding tax regime include; reduced rates for businesses with low margins, measures to curb evasion and tax avoidance, exemption of small businesses from withholding tax, clarity on timing of deductions and key terms etc.
