Nigeria: Withholding tax rate, 5% on payments for buildings, construction

Nigeria: Withholding tax rate for buildings

Regulations publicly available in January 2017 have effectively reversed a reduction in the withholding tax rate that applies with respect to payments for all aspects of building, construction, and related activities (but not to survey, design and delivery activities).

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The withholding tax rate is 5% (effective 9 November 2016) and not 2.5% as had been scheduled. 

KPMG observation

The notice [PDF 402 KB] about the withholding tax rate was published in the official gazette of 23 November 2016 but only became publicly available in January 2017. This is why taxpayers are being directed to apply the withholding tax rate of 5% as of the November 2016 date. However, the delay in making the gazette publicly available raises concerns about how taxpayers, who may have applied withholding tax at the rate of 2.5% and made payments to vendors on this basis, are to account for the shortfall in the withholding tax.

 

Read a January 2017 report [PDF 102 KB] prepared by the KPMG member firm in Nigeria

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