BREAKING: FG to implement fresh tax regulations for manufacturers

The Federal Government has introduced fresh tax regulations aimed at easing the tax burden on manufacturers and small businesses.....KINDLY READ THE FULL STORY HERE▶

Wale Edun, the Minister of Finance, signed the new guidelines, announced in the “Deduction of Tax at Source (Withholding) Regulations, 2024,” on Wednesday.

According to the regulations, businesses without a Tax Identification Number (TIN) will face a doubled deduction rate.

“The amount to be deducted at source shall be twice the rate specified where the recipient has no TIN,” the document states.

The new regulations cover tax deductions under the Capital Gains Tax Act, Companies Income Tax Act, Petroleum Profits Tax Act, and the Personal Income Tax Act. They aim to streamline tax collection, reduce tax evasion, and promote global best practices. The initiative also targets small businesses, with an exemption for those earning below N2 million monthly, provided they have a valid TIN.

“A deduction made from a payment shall not be regarded as a separate tax or an additional cost,” Edun explained, ensuring that the new rules don’t increase costs for businesses.

The regulations will come into effect on January 1, 2025, with an option for early implementation starting July 1, 2024. Entities such as government ministries and public authorities are required to deduct taxes at source, while exemptions cover transactions like registered securities lending and manufactured goods.

The Federal Inland Revenue Service will issue further guidelines to ensure a smooth rollout, reflecting the government’s efforts to modernise Nigeria’s tax system and support key sectors like manufacturing and telecommunications.