The federal government has categorised all electricity companies, including the Generation and Distribution Companies , as those exempted from the payment of Withholding Tax in the country. The new Withholding Tax regulation document signed by the Minister of Finance, Wale Edun, explained that the new Withholding Tax regulation was proposed by the Tax and Fiscal Policy Committee led by Taiwo Oyedele and took effect from July 1, 2024.
' It explained that the Federal Inland Revenue Service , Withholding Tax serves as a prepayment of Income Tax deducted at rates between 5 and 10 per cent depending on transaction. According to the document, Withholding Tax was introduced into Nigeria’s tax system in 1977 as an advance payment of Income Tax on specified transactions.