Checkout Magazine has learnt that firms without Tax Identification Number (TIN) will not enjoy the exemption from Withholding Tax payment.
This is one of the conditions stipulated in the Withholding Tax reform regulation which took effect on January 1.
In the new regime, small businesses with low margins of returns are completely exempted from payment of Withholding Tax.
However, they have been mandated by the Federal Government to deduct Withholding Tax while making payments to any of their suppliers without TIN.
Suppliers who exceed N2 million payments per month will also not enjoy the exemption from payment of Withholding Tax.
But, if a small business fails to deduct tax as mandated, it may face administrative penalties.
Besides, failure to remit deducted taxes could attract penalties and interest charges.
The easing of fiscal obligations is expected to lower the cost of working capital, leading to enhanced cash flow and a more favourable business climate.
One critical aspect of the new regulations concerns the proper reporting of tax deductions when suppliers do not have a TIN.
Taiwo Oyedele, Chairman of the Presidential Fiscal Policy and Tax Reform Committee, noted that the new tax measures have been designed to bolster compliance while simultaneously promoting business continuity among small enterprises.
