Index Managers

Celebrating Strength, Resilience, and Excellence! 💪
Happy International Men’s Day from all of us at Index Managers! 🌟

🌟 Weekend Vibes: Time for Family Fun! 🌟

Weekends are the perfect opportunity to unplug from the hustle and bustle and focus on what matters most – family. Here are a few ideas to make the most of your time together:

🎨 Try a DIY craft or baking project.
🎲 Have a family game night.
🌳 Take a walk or hike in nature.
🍿 Enjoy a cozy movie marathon.
Whatever you choose, make sure to cherish these moments of joy and connection.

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The secret to progress? Just get started! ✨ Set your intentions, write down your goals, and tackle them one step at a time. Let this Monday be the start of something great. 💪📝

New WHT Regulations and Small Businesses - Frequently Asked Questions (FAQs)

Q1. How will the new WHT Regulations affect small businesses?

A1. Small businesses will enjoy exemptions from withholding tax under the new rules. This will reduce their tax burden, lower their cost of working capital, improve their cash flows, and overall ease of doing business.

Q2. What does the exemption entail in practical terms?

A2. It means that small businesses are no longer required to deduct tax on payments to their suppliers. However, to curb tax evasion, they must deduct tax if the supplier has no Tax Identification Number (TIN) or where the total payment to a supplier is one month exceeds N2 million except for transactions which are specifically exempted as listed in the Regulations.

Q3. How will the deduction be reported to the tax authority if the supplier has no TIN?

A3. Where a supplier has no TIN, the NIN in the case of an individual or RC number in the case of a company should be stated. The rate of withholding tax on such payment is doubled. This doubled rate is not applicable to investment income such as dividend, interest, and rent.

Q4. What is the definition of a small business?

A4. A small business is any company or an enterprise with an annual turnover not exceeding N25 million. There is a draft proposal to increase this threshold to N50 million subject to the law being enacted.

Q5. Where a deduction of tax is applicable, can the supplier insist that any deductions be grossed up, thereby increasing the cost of the small business?

A5. No. The new WHT Regulations prohibit the treatment of tax deduction at source as an additional cost of the recipient.

Q6. How about withholding tax on payment of an invoice due to a small business?

A6. Withholding tax is not applicable on payments due to a small business in the following circumstances:

- a small company with annual turnover not exceeding N25 million

- all businesses in respect of manufacturing, agriculture, and other production activities regardless of their turnover

- sales in cash or instant electronic payments

- other transactions stated as exempt under the new regulations

Q7. Does a small business need to file monthly withholding tax returns, whether it has withholding tax to remit or not?

A7. No. Businesses, including SMEs, are only required to file returns in any month when they have deducted taxes at source in the previous month. Such returns should contain the information prescribed in the schedule to the WHT Regulations.

Q8. What happens if a small business fails to deduct tax where applicable?

A8. An administrative penalty will be charged for failure to deduct tax where applicable. If you deduct tax and fail to remit it by the due date being the 21st (for remittances to FIRS) or 30th (for remittances to a state Internal Revenue Service) of the following month, you will be liable to pay the amount not remitted with penalty and interest.

Q9. When does the new Withholding Tax Regulations take effect?

A9. The new rules take effect from 1st of January 2025. However, an early adoption may be permitted subject to guidelines issued by the relevant tax authority.

Q10. How can we learn more about the new WHT Regulations and other ongoing fiscal and tax reforms?

Q10. You can learn more by visiting the fiscalreforms.ng website or social media accounts “Fiscal Reforms” on X, LinkedIn, Facebook, Instagram, YouTube, and WhatsApp Channel.

Happy Independence Day, Nigeria! 🇳🇬 Today we celebrate freedom, unity, and the power of the people. Together, we can continue to build a stronger nation where every voice is heard and every dream is valid. Let's honor the past and march forward to a brighter future! 🌍💚

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THE CURRENT POSITION OF LAW

For an Appeal against the Service or relevant tax authority under Rules 1 and 2 of Tax Appeal Tribunal Order, the aggrieved person shall:

(a) pay 50% of the disputed amount into the designated account by the Tribunal before hearing as security for prosecuting the appeal;

(b) file the Notice of Appeal as in Form TAT I(A), along with a deposition as in Form TAT I (B).

OUR BASIS FOR AMENDMENT

Based on the principle of fairness in taxation we are of the opinion that asking a tax payer to deposit 50% of the disputed sum and with no obligation on FIRS before an appeal can be heard portrays the tribunal as been skewed towards a party.