The Federal Government has approved the exemption of small businesses, manufacturers and farmers from paying withholding tax as a way of reducing the tax burden on businesses.
The Chairman of the Presidential Committee on Fiscal Policy and Tax Reforms, Taiwo Oyedele, disclosed this in a statement on his official X handle on Tuesday.
According to him, the government has also introduced key changes to the previous tax regime such as reduction of rates for businesses with low margins and measures to curb evasion.
Oyedele added that President Bola Tinubu has approved the new withholding tax regime for the country with the official gazette expected to be signed in the coming days.
He stated that 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.
