Public outcry about the one per cent withholding tax imposed on interest earned by individuals on any investments has received attention from the Finance Ministry, causing a withdrawal of the tax.
The Ministry of Finance has submitted proposals to Parliament to reverse the decision. “On the issue of the imposition of a 1% tax on interest earned by individuals, Government has already submitted proposals to Parliament to reverse the position,” a statement from the Finance Ministry said.
Also the statement issued by the Minister of Finance, Mr Seth Terkper, explained that the government had taken note of the concerns of taxpayers and the general public on some provisions of the Act, particularly those relating to withholding tax on the provision of services and the payment of tax on interests paid to individuals.
“The essence of the withholding tax regime on services is to improve tax compliance. It is not a final tax but a payment on account. Therefore, the increase in withholding tax on services to 15 per cent is to encourage taxpayers to file their returns, after which they will be entitled to a credit for the amount withheld,” the statement further explained.
Read the Finance Minister's full statement below: