FIRS Moves To Boost Revenue As 10% Withholding Tax Takes Effect On Short-Term Securities
In an effort to enhance tax compliance and increase national revenue, the Federal Inland Revenue Service (FIRS) has instructed banks, stockbrokers, and other financial institutions to commence deducting a 10% withholding tax on interest earned from short-term securities.
The directive, which took immediate effect, covers instruments such as treasury bills, promissory notes, and other short-term government or corporate securities.
According to the FIRS, the move aligns with efforts to ensure fairness in the nation’s tax system and plug revenue leakages within the financial sector.
By enforcing this deduction at source, the Service aims to simplify tax collection and ensure that investors and financial intermediaries alike contribute their fair share to national development.
The circular further instructed all affected institutions to remit the deductions to the FIRS promptly, warning that failure to comply would attract sanctions in line with existing tax laws.
This latest measure reflects the government’s renewed drive to broaden its tax base and reduce dependence on oil revenue amid economic challenges and fiscal reforms.
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