The Presidential Committee on Fiscal Policy and Tax Reforms, has proposed the exemption of manufacturers and farmers from payment of withholding tax.
The committee said this is a way of reducing the tax burden on businesses, promote competitiveness, equity and ease of compliance and tax avoidance, detect tax evasion and reflect what is happening globally.
Chairman of the committee, Taiwo Oyedele, disclosed this at a public consultation workshop on the proposed changes to the National Tax policy held in Lagos.
He noted that withholding tax is the most difficult to comply with in Nigeria due to its complexity.
Oyedele further pointed out that one of the objectives of his committee was what to do with withholding tax regulation and one of the things it had come up with was to simplify the tax.
“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,” he added.
According to him, the proposal had already been signed and would be made public in a few days.
