Withholding Tax (WHT) FAQ

What is Withholding Tax?

Withholding Tax is basically an advance payment of income tax which may be used to offset or reduce
tax liabilities. It is an advance payment to be applied as tax credit to settle the income tax liability of the
years of assessments to which the income that suffered the deduction relates. Withholding Tax is not a
tax but a prepaid tax.

What is the rate of Withholding Tax for Companies and Individuals on Transaction?

There are varying rates of WHT ranging from 2.5% to 10% for companies and 5% to 10% for individuals depending on the transaction. ​

What is the Due Date of Filing Withholding Tax?

There are varying rates of WHT ranging from 2.5% to 10% for companies and 5% to 10% for individuals depending on the transaction. ​

What is the Due Date of Filing WHT?

On or before the 21st day of the month following the month in which the deductions were made.​

Who are the Collecting Agents for WHT?

All organizations or bodies making payments to suppliers of goods and services. They are required to make deductions of Withholding Tax and remit to the Tax Authority as payments are being made to suppliers/vendors.​

What are the Relevant Documents Required for Filing WHT?

i. Evidence of payments such as bank teller, e-ticket, e-acknowledgement etc. from an FIRS designated revenue collecting bank. ii. Schedule of WHT deducted indicating the: Name of supplier/vendor, Taxpayer Identification Number (TIN) of company or individual (supplier/vendor) from which the tax was withheld and the related amount.

How do you pay WHT?

WHT is paid into the Federation Account through all FIRS designated revenue collecting banks.

Is there any exemption from Withholding Tax?

Yes, there are certain transactions that are exempted from WHT,
such as;
i. Direct purchase across the counter,
ii. Direct purchase of raw materials from supplier as distinct from contract of supplies
iii. Sale in the ordinary course of business.
iv. All imported goods.
v. Inter- bank interest.
vi. Income exempted from income tax
vii. Claims in insurance business
viii. Interest on Bonds
ix. Dividends redistributed by Holding Companies

Is mobilisation fee liable to WHT?

Yes, Mobilisation fee is liable to WHT. In addition, every Certificate of work done issued at the different
stages of a contract must be subjected to 5% WHT. However, the amount of WHT being deducted at source
from the mobilisation fee paid at the inception of the contract should be adjusted (deducted) from the
WHT due on the next payment in respect of the certificate of work done issued and the balance should be
remitted to the relevant tax authority.

What are the relevant documents required for filing WHT Returns?

Relevant documents for filing WHT includes:
i Evidence of payments to an authorised banks – e-ticket
ii. Schedule of WHT deducted showing:
a. Period covered
b. Name of supplier
c. Addresses
d. Nature of supply
e. Gross amount
f. WHT rate
g. WHT amount
h. TIN of agent making remittance
I. TIN of beneficiary (taxpayer).

What is the content of remittance schedule of Withholding Tax Returns?

I. Name and address of the Agent/Depositor.
ii. TIN of the Agent/Depositor
iii. The name and address of the Taxpayer/Beneficiary
iv. TIN of the Taxpayer/Beneficiary
v. The nature of transaction
vi. The gross value of the business on which WHT is being deducted
vii. The applicable rate of WHT
viii. The amount of WHT deducted.
ix. Period covered

What is Withholding Tax Credit Note?

This is the document issued by the Tax Authority showing that a taxpayer has suffered tax deduction at

What are the contents of Withholding Tax Credit Note?

Withholding Tax Credit Note will generally include the following information:

  • Credit note Number.
  •  The name of the agent/taxpayer who deducted and remitted the Withholding Tax.
  •  The name of beneficiary from whose income WHT was deducted.
  • The nature of transaction.
  •  The date of the transaction.
  • The name of the bank through which remittance was affected.
  •  The amount deducted
  •  The period covered

Can WHT Credit note be used to offset late returns penalty (LRP)?

No, WHT Credit Note cannot be used to offset LRP. Penalty is not Tax, WHT Credit Note can only be used to
offset income tax due.

Why does it take longer time to confirm WHT Credit Notes issued by the same FIRS?

Confirmation of WHT Credit Notes took longer time because of the manual processes involved.
Confirmation will now be done on-line with the coming of the FIRS web-portal

What is the Rate of Withholding Tax for Companies and individuals on transactions?

Rates of WHT for corporate companies and individuals on transactions are as follows:-


TransactionsCompanies (%)Individuals (%)
Contract of Supplies55
Contract of Construction55
Technical Service105
Professional Service105
Management Service105
Hire,Charter, List1010
Directors Fees1010