Minister of Finance and Coordinating Minister of the Economy, Wale Edun, has released fresh regulations on withholding tax under the Capital Gains Tax Act, Companies Income Tax (CIT) Act, Petroleum Profits Tax (PPT) Act, and the Personal Income Tax (PIT) ACT. Edun explained that the new regulations, effective July 1, 2024, superseded any other rules regarding deductions at source or withholding tax.
Captioned “Deduction of Tax at Source (Withholding) Regulations 2024,” the minister said he was issuing the fresh regulations in exercise of the powers conferred on him by Section 81(9) of the Companies Income Tax Act, section 56 of the Petroleum Profit Tax Act, section 73(6) of the Personal Income Tax Act, and of all other powers enabling him.
Edun cited the “First Schedule” to the Regulations to enumerate the eligible transactions and the applicable rates at which deductions shall be made at the source. The regulations also listed entities mandated to make deductions at source to include a body corporate or unincorporated, other than an individual; a government; government ministry; department or agency; a statutory body; a public authority; any other institution, organisation, establishment or enterprise including those exempt from tax as well as a payment agent on behalf of any person.
Providing further insight, the minister explained that the new regulations provided that in the case of payment to the FIRS, the deduction must be remitted not later than the 21st day of the month following the month of payment. In the case of payment to a State Internal Revenue Service concerning Capital Gains Tax and Pay-As-You-Earn, the regulations specified a period not later than the 10th day of the month following the payment. Concerning any other deduction, the guidelines indicated a period not later than the 30th day of the month following the month of payment.
