FG to Tax Reality TV Shows, Lottery Winners, Sets Date to Commence
- A new tax administration will begin in January 2025 and will see reality show and lottery winners pay five per cent tax
- The development is according to new withholding tax guidelines due to commence next year
- The new regulation’s objectives are to define withholding tax rules under the Capital Gains Tax Act, among others
Legit.ng’s Pascal Oparada has reported on tech, energy, stocks, investment and the economy for over a decade.
Beginning in 2025, reality TV shows and lottery winners like Big Brother Naija will pay a five per cent tax on their winnings.
The announcement is based on new withholding tax guidelines issued by Wale Edun, the minister of Finance and Coordinating Minister of the Economy.
Source: Getty Images
FG reveals objectives to new guidelines
The official gazette, dated October 2, 2024, shows that non-residents' winnings from the lottery, gaming, reality shows, and other sources will be subject to a five per cent tax deduction.
PAY ATTENTION: Legit.ng Needs Your Help! Take our Survey Now and See Improvements at LEGIT.NG Tomorrow
The new regulation’s objectives are to define withholding tax rules under the Capital Gains Tax Act, the Companies Income Tax Act, the Petroleum Tax Act, and the Personal Income Tax Act.
The move is also expected to curtail tax evasion and remove complexities attached to tax deductions at source, making it more transparent which kinds of payment are taxable and compliant.
According to reports, the government made the same changes to withhold tax regulations in July this year but will become effective in October 2024.
The new changes commence in 2025
The report said that while the changes are the same as those made in October 2024, the significant difference is that taxation of reality shows and lottery winners will commence on January 1, 2025.
The rules also state that reality shows or lottery winnings are not subject to tax from the source. However, they are subject to personal income tax.
The development means that Big Brother Naija will not deduct tax from the prize money, but winners are expected to pay income tax after they are paid.
The new regulation coincides with a new tax bill that requires persons in banking, insurance, stockbroking, and other financial services to provide a Tax Identification Number (TIN) before opening or operating a bank account.
90 per cent of Nigerians are taxed wrongly
The new guideline requires that those who earn passive income from investments in Nigeria are exempt from the new requirement but must submit relevant information to tax authorities.
The chairman of the Presidential Fiscal Policy and Tax Reforms Committee, Taiwo Oyedele, disclosed that high-net-worth individuals earning over N100 million monthly will pay 25% personal income tax.
Oyedele said there needs to be a balance between reducing the tax burden for low-income earners and ensuring that the rich pay more taxes, stressing that 90% of those who pay tax in Nigeria should not have been taxed.
FIRS rakes in N5.5 trillion in tax revenue in 6 months
Legit.ng earlier reported that the Federal Inland Revenue Service (FIRS) collected a total tax revenue of N5.5 trillion from January to June 2023.
Legit.ng earlier reported that FIRS set a new record after collecting over N10 trillion in revenue in 2022. It was the first time the revenue agency crossed the N10 trillion mark in tax revenue collection.
According to a statement released by the agency on Thursday, Premium Times reported that the new record is the most extensive tax income collection the Service has ever seen in the first half of a fiscal year.
Proofread by Kola Muhammed, journalist and copyeditor at Legit.ng
PAY ATTENTION: Сheck out news that is picked exactly for YOU ➡️ find the “Recommended for you” block on the home page and enjoy!
Source: Legit.ng
