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 In case you don't know or you have forgotten, WHT actually means 'WITH-HOLDING TAX. This is not another type of Tax like VAT or EDT. This is actually an ADVANCE PAYMENT OF INCOME TAX. Let us put it this way. The Federal Government believes that Companies and Business Owners will not make tax returns at the end of their Financial Year and as such will not pay their Income Taxes. So, the Regulations for WHT is that "your Customer should not pay you all the amount you invoiced them. Your Customer are by Law mandated to deduct some money from your invoice and pay to the Federal Government (FIRS) Account on "YOUR BEHALF". Your Customer is to collect a Receipts from the Relevant Tax Authority and give to you. Those WHT Receipts serve as Tax Credit Notes for you. At the end of your financial year, you will assess yourself and declare how much Income Tax you are liable to. The WHT Receipts you have will be used to offset your Income Tax Liabilities to the tune of the sum total of your available WHT Credit Notes.

WHT are deducted from your invoices by your Customers based on different Rates for different types of Transactions as stipulated in the WHT Regulations. So, what is the breaking News here?

During the last Administration, the former Coordinating Minister for the Economy and Minister of Finance on the 17th of December 2014, issued the COMPANIES INCOME TAX (RATES ETC., OF TAX DEDUCTED AT SOURCE (WITHHOLDING TAX)) AMENDMENT REGULATIONS, 2015 which reduced the WHT applicable to all aspects of building, construction and related activities (excluding survey, design and deliveries) from 5% to 2.5%.

This was done in order to encourage and grow the Construction Industry. With the reduction in WHT rate, the construction Industry will be able to have less Cashflow challenges.

Anyway, this is to inform you that the Current Administration through the current Minister, on the 9th of November 2016, issued the COMPANIES INCOME TAX (RATES ETC., OF TAX DEDUCTED AT SOURCE (WITHHOLDING TAX)) AMENDMENT REGULATIONS, 2016 which is a revocation of the COMPANIES INCOME TAX (RATES ETC., OF TAX DEDUCTED AT SOURCE (WITHHOLDING TAX)) AMENDMENT REGULATIONS, 2015.  This new Regulation has reversed the WHT applicable to Building, Construction and related activities back to 5%. This is with effect from 9th November 2016. However, the Official Gazette publishing this New Regulation was made public in January 2017.

My question is simple. Why the increase in this Rate? Is it a means of generating more advance taxes from Tax Payers to the Government? Is the Government not supposed to be giving businesses incentives to thrive in this economy?
What is your opinion on this? Will this increase in WHT rate for the construction Industry increase the Cashflow challenges of the industry in this Recessed Economy?

The Past Administration reduced the rate from 5% to 2.5% and the Current Administration reversed it back to 5%. Are we going forward or backward? Is the increase in WHT Rate a way out of Recession? 

For me, it is a case of Reversing the Reversals! How do you interpret this? Kindly drop your comment below.


  1. I am not surprised!!! Buhari government has no good intention for Nigeria masses and invariably no economic solution to recession.They are playing politics with everything and everyone.

    1. Maybe that is their solutions to drop in Government Revenue due to fall in Oil Prices

  2. I even think it was rather a harsh and quick revocation of an incentive to encourage local Construction companies.


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