The federal government has endorsed a new tax framework exempting manufacturers, farmers, and small businesses from withholding tax obligations. Additionally, reduced rates are now in place for businesses with narrow profit margins, alongside new measures to combat evasion and minimize tax avoidance.
According to Taiwo Oyedele, Chairman of the Presidential tax reform committee, the government has sanctioned easier access to credit and the utilization of tax deducted at source. These adjustments aim to address current issues and adopt global best practices. The updated regime also clarifies the timing of deductions and defines key terms.
“The approved regulations will soon be published in the official gazette,” Oyedele announced via his verified social media account yesterday. This move is part of ongoing fiscal policy and tax reforms under the current administration.
Introduced in 1977 to ensure steady government revenue and deter tax evasion, withholding tax has expanded over time to cover more transactions, leading to complexities and burdens for many businesses, especially SMEs and low-margin enterprises.
