FG Exempts GenCos, DisCos, Others From Withholding Tax

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The federal government has exempted all electricity companies, including Generation and Distribution Companies (GenCos and DisCos), from paying Withholding Tax, effective July 1, 2024.

This exemption, outlined in the new Withholding Tax regulation signed by Finance Minister Wale Edun, categorizes electricity and gas companies under “manufacturing” and “production,” thereby relieving them of Withholding Tax obligations.

Withholding Tax (WHT) in Nigeria typically ranges from 5% to 10% and serves as an advance payment of Income Tax on specified transactions.

The Tax and Fiscal Policy Committee, led by Taiwo Oyedele, proposed the new regulation to simplify the tax system. This is because of the complexities that had grown over time, including ambiguities in compliance, transaction eligibility, tax rates, and remittance timing.

Oyedele highlighted that while WHT historically provided steady government revenue and curbed tax evasion, its expansion had made compliance burdensome.

(DAILY TRUST)

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