Anambra State Urges Compliance with Withholding Tax Regulations to Avoid Penalties

The Anambra State Government has called on all corporate entities, government agencies, and institutions operating within its jurisdiction to submit their monthly Withholding Tax (WHT) returns, warning that failing to do so could result in significant penalties.

Greg Ezeilo, Chairperson of the Anambra State Internal Revenue Service, made the announcement in a public notice issued on Friday.

According to Ezeilo, even statutory bodies, public authorities, tax-exempt organizations, and government ministries are obliged to complete their monthly WHT returns. He detailed that the directive aligns with the Nigeria Tax Administration Act of 2025 as well as the Withholding Tax (Deduction at Source) Regulations of 2024.

Ezeilo clarified that WHT must be deducted from payments for all eligible transactions, and these taxes need to be remitted to the state treasury by the 21st of the following month.

He also warned that any transactions conducted with entities lacking a valid Tax Identification Number (TIN), National Identification Number (NIN), or Anambra State Identity Number would incur WHT deductions at double the standard rate.

Regarding penalties, Ezeilo outlined that non-compliance with the tax obligations could lead to fines of up to N1 million or potential imprisonment, subject to the specifics of the violation.

To facilitate compliance, he encouraged businesses needing assistance to reach out to the Anambra State Internal Revenue Service through its designated phone lines or visit its office in Awka for inquiries.

Taxpayers are required to submit their returns along with a detailed breakdown of deductions, including the taxpayer's name, address, transaction date, and transaction type, via the state’s official portal.

The Nigeria Tax Administration Act was enacted in June 2025 by President Bola Tinubu, with an effective date of January 1, 2026. This comprehensive law consolidates four individual tax reform bills into one streamlined document for better clarity and management.

Key provisions of the new legislation include provisions exempting anyone earning N800,000 or below annually from income tax. Those earning higher amounts will be taxed progressively, with rates reaching up to 25% of their income.

Additionally, for unemployed Nigerians, the income tax exemption threshold has increased from N10 million to N50 million, while individuals making N108,000 or less monthly, and households earning N250,000 or less, are exempted from tax.

Small businesses, defined as those with an annual turnover of N100 million or less and total fixed assets not exceeding N250 million, are also completely free from all forms of taxation. Previously, the turnover limit was set at N25 million.

Moreover, the share of the federal government's Value Added Tax (VAT) has been reduced to 10% from the earlier 15%. In contrast, the share allocated to states has been raised to 55% from 50%, while local governments' share remains unchanged at 35%. The distribution of funds to states and local governments will be based on various parameters, including equal sharing, consumption location, and population statistics.