The Federal Inland Revenue Service (FIRS) has announced the commencement of the implementation of the withholding tax system.
This is aimed at streamlining tax collection, enhancing compliance, and boosting revenue for critical sectors.
In a statement issued yesterday, Collins Omokaro, Special Adviser to the Executive Chairman of the FIRS on Communication and Advocacy, said the new system would ensure efficient and transparent tax collection while fostering accountability among businesses and employers.
The regulation mandates the deduction of taxes directly from payments such as salaries, rent, professional fees, and dividends, placing the responsibility on businesses, employers, and other payers to withhold taxes at the point of payment.
According to the FIRS, this approach is designed to guarantee a steady inflow of revenue and minimize tax evasion.
A key feature of the regulation is the integration of Tax Identification Numbers (TINs) with transactions, alongside the establishment of penalties for non-compliance.
