On July 1, 2024, the Federal Ministry of Finance issued the Deduction of Tax at Source (Withholding) Regulations 2024 (the “WHT Regulation” or “Regulation”). The Regulation which was issued pursuant to the powers of the Minister under, Section 81 (9) of the Companies Income Tax Act and Section 73 (6) of the Personal Income Tax Act to make regulations to govern the deduction of tax at source provides a clear framework for the deduction of withholding tax (WHT).

The Regulation was issued as part of the ongoing reforms by the Presidential Committee on Fiscal Policy and Tax Reform to improve the administration of WHT in Nigeria by providing a definite scope for its collection and remittance in Nigeria. The Regulation is to take effect on July 1, 2024

This article provides an overview of the Regulation, starting with a brief description of the concept of withholding tax. It identifies the highlights of the Regulation and briefly discusses its legal and economic implications for taxpayers, the tax system, and the Nigerian economy.