‘New tax regulation a game-changer for Nigeria’s landscape’

Nigeria has introduced the Deduction of Tax at Source (Withholding Tax Regulation 2024), which took effect 1st of January 2025. According to the Special Adviser to the Executive Chairman of the Federal Inland Revenue Service (FIRS) on Communication and Advocacy, Collins Omokaro, this reform aims to streamline tax collection, enhance compliance, and increase revenue for […]

Nigeria has introduced the Deduction of Tax at Source (Withholding Tax Regulation 2024), which took effect 1st of January 2025.

According to the Special Adviser to the Executive Chairman of the Federal Inland Revenue Service (FIRS) on Communication and Advocacy, Collins Omokaro, this reform aims to streamline tax collection, enhance compliance, and increase revenue for critical sectors like healthcare, education, and infrastructure development.

“The new regulation is a game-changer for Nigeria’s tax landscape. It will ensure that taxes are collected efficiently and transparently while fostering accountability among businesses and employers,” Omokaro said.

The regulation mandates the deduction of taxes directly from payments such as salaries, rent, professional fees, and dividends. By placing the responsibility on businesses, employers, and other payers to withhold taxes at the point of payment, the government hopes to ensure a steady revenue inflow and minimize tax evasion.

The new regulation introduces strategic measures, including integrating Tax Identification Numbers (TINs) with transactions and setting penalties for non-compliance. By adjusting tax rates for residents and non-residents, the government seeks to support local businesses while ensuring fair accountability for foreign businesses.