The Chairman of the Presidential Committee on Fiscal Policy and Tax Reforms, Mr, Taiwo Oyedele, on Thursday hinted that the committee had proposed the exemption of manufacturers and farmers from paying Withholding Tax (WHT) as part of its recommendations to reduce tax burden on businesses in the country.
Oyedele made this disclosure during a Public Consultation Workshop on the proposed changes to the National Tax Policy held in Lagos.
He maintained that WHT remained the most difficult tax to comply with in the country due to its complex structure, hence the committee’s proposal to exempt real sector operators and farmers and agribusiness owners from paying it.
He clarified: “We set out the objectives of what we want to do with withholding tax regulation. One of them is to simplify the tax, We want to reduce the burden on businesses, promote competitiveness, equity and ease of compliance and tax avoidance, detect tax evasion and reflect what is happening globally,
“We are creating an exemption for withholding tax for small businesses and what we have in mind is N50 million. We have reduced the rate for real businesses to as low as 2% – people producing goods and services because the margins are very small.
“We have created an exemption for manufacturers, So, if you are a manufacturer, don’t worry about withholding tax, If you provide input to manufacturers like farmers, don’t worry about withholding tax”, the tax expert added.
According to him, the proposal had already been signed by the President and will be made public within the next few days.
Oyedele further pointed out that for businesses not registered with the Corporate Affairs Commission (CAC), tax agencies would deduct 200% of the normal tax rate for them as sanction for non-registration in order to compel them to formally register their businesses.
On the frequent changes of Customs duties exchange rate on imports, which had been a major complaint of manufacturers and other import-dependent business owners in the country, the committee chairman said the committee had proposed the pegging of the Customs duties exchange rate at N900/$1 as approved in the 2024 budget.
