Understanding the WHT Regulation 2024: A Complete Guide
The Impact of the New WHT Regime on Business Efficiency and Compliance
As part of ongoing fiscal policy and tax reforms, the Minister of Finance and Coordinating Minister of the Economy, Mr. Olawale Edun, recently signed the new Deduction of Tax at Source (Withholding) Regulations, 2024, effective July 1, 2024. These regulations aim to simplify and clarify complexities surrounding WHT compliance in Nigeria.
Key Changes Introduced by the New Withholding Tax Regulations
The new regulation introduces several significant changes to the administration of withholding tax in Nigeria, including:
- Exemption from WHT Deduction Obligations: Certain transactions are now exempt from the requirement to deduct WHT.
- Transactions Exempted from WHT Deduction: Detailed list of transactions that are no longer subject to WHT.
- Eligible Transactions and Applicable Rates: Updated list of transactions eligible for WHT and their corresponding rates.
- Obligation to Deduct: Clarified responsibilities for entities required to deduct WHT.
- Deduction, Not a Separate Tax: Emphasis that WHT is a deduction, not an additional tax.
- Issuance of Receipts for WHT Deducted: New guidelines for issuing receipts for deducted WHT.
- Offences: Defined penalties for non-compliance with the new regulations.
This development is particularly beneficial for SMEs and manufacturers, who have long viewed WHT as a significant burden on their working capital. The new regulations provide much-needed clarity and relief.
While many issues posed by the previous withholding tax regime have been addressed, some aspects of the new regulations require further clarification.
To read the full article and understand all the details, download the comprehensive guide below.
