Manufacturers, SMEs Exempted from Withholding Tax in New Law

The Federal Government (FG) has signed into law a new bill proposed by the Presidential Fiscal Policy and Tax Reforms Committee, exempting manufacturers and small businesses from paying withholding tax.

This announcement was made by Taiwo Oyedele, the committee’s chairman, during a press briefing on Thursday in Lagos. “We sent the withholding tax proposal to the National Assembly for approval and I just heard it has been signed,” Oyedele stated.

The tax advisory committee also recommended the elimination of over 60 taxes, leaving only eight primary taxes: income tax, value-added tax, property tax, custom duties, excise tax, stamp duties, special levies, and harmonized levies.

Furthermore, the committee proposed the establishment of the Nigerian Revenue Service as the central tax agency, with sub-national departments, to replace over 100 different collection agencies.

Other recommendations include restructuring the government budget to classify items under infrastructure, human capital investment, personnel cost, headcount and productivity, administrative overheads, debt service, sinking funds, fully implementing zero-based budgeting, and introducing long-term appropriation.

The committee urged the government to combat systemic corruption, prioritize spending on basic needs to address multidimensional poverty, limit borrowing to productive spending and self-financing projects, and enhance the effectiveness of public procurement.

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