This was revealed on Tuesday by Taiwo Ayodele, the chairman of the presidential committee on fiscal policy and tax reforms.
According to Ayodele, the significant burden that the previous policy document placed on farmers and small and medium-sized businesses has been alleviated by the new withholding tax policy.
“In order to act as an advance payment of income tax on specific transactions, withholding tax was introduced into the Nigerian tax system in 1977. As background, Taiwo said, “It was intended to discourage tax evasion and to provide the government with a consistent flow of money.
He enumerated the difficulties associated with the previous withholding tax system, citing things like “timing of the obligation for remittance, applicable rates, eligible transactions, and persons required to comply, among others.”
The deduction is being handled as a distinct tax, which raises the total number of taxes and operating expenses. difficulties in getting reimbursements for overpaid withholding taxes.
Absence of an exemption threshold renders the costs associated with taxpayer compliance and tax authority enforcement unfeasible. The chairman of the Tax Reform Committee stated that certain new and modern challenges are not adequately handled.