UBA hosts SME business series on 2024 withholding tax regulations

The United Bank for Africa (UBA) recently hosted the first edition of its 2024 Knowledge Series webinar, themed “2024 Withholding Tax Regulations: Specific Emphasis on How They Affect SMEs.”

The event, held at UBA House in Marina, Lagos, provided an in-depth discussion on the impact of the new withholding tax regulations and offered strategic insights to help businesses navigate the evolving tax landscape.

The session featured expert speakers, including Babatunde Ajayi, Head of SME Banking at UBA; Adeyemi Adeniran, Financial Analyst at Anderson Consulting; and Vincent Okoukoni, Tax Analyst at Anderson Consulting. They shared practical guidance on how SMEs can comply with the new tax policies while optimizing financial sustainability and growth opportunities.

Explaining the fundamentals of the newly revised withholding tax regulations, Adeyemi Adeniran noted that the updated framework aims to address inefficiencies in the previous tax system and ensure timely remittances to support government obligations.

“What this means is that while individuals and companies are required to pay their taxes at the end of the year, the government is saying, through withholding taxes, that it cannot wait until the end of the year to collect these taxes because it has immediate obligations,” Adeniran stated.

“Therefore, as transactions occur between parties, the customer is required to withhold a portion of the tax and remit it to the government rather than wait until year-end.”

Adeniran further explained that the updated regulation is designed to rectify the challenges and inefficiencies that have persisted in the withholding tax mechanism over the past several years.

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Vincent Okoukoni highlighted the benefits of the 2024 withholding tax regulations for SMEs, noting that businesses with an annual turnover of less than N25 million are exempt from tax deductions on received payments.

“For SMEs, the new regulations bring a significant benefit. If your business has an annual turnover of less than N25 million, your customers are not required to deduct taxes from the payments they owe you,” Okoukoni explained.

“This means you receive the full payment, which directly improves your cash flow. It’s a positive development for SMEs, as it allows them to retain more funds to support and grow their operations.”

Adeniran added that for SMEs to qualify for the exemption, they must meet two key conditions: they must be registered with the tax authority, and their transaction amount in any given month must not exceed N2 million.

Babatunde Ajayi, Head of SME Banking at UBA, reaffirmed the bank’s commitment to supporting small and medium enterprises under the new withholding tax framework.

“At UBA, we will continue to ensure SMEs get the needed support to thrive and soar, especially under the new withholding tax regulations,” Ajayi stated. “SMEs are not just businesses; they are innovators and risk-takers who play a pivotal role in shaping the future of the continent.”

Following the session, UBA’s Group Head of Marketing and Corporate Communications, Alero Ladipo, applauded the expert panel for their valuable insights and emphasized the importance of the Knowledge Series in equipping SMEs with the necessary tools to navigate tax and financial policies effectively.

“At UBA, it is not just about banking; we are also passionate about helping our customers grow thriving businesses. That is why we have launched this new series to increase the knowledge of our customers,” Ladipo said.

United Bank for Africa remains one of Africa’s leading financial institutions, serving over 45 million customers worldwide.

With a workforce of 25,000 employees and operations in 20 African countries, as well as the United Kingdom, the United States, France, and the United Arab Emirates, UBA continues to lead financial inclusion initiatives while leveraging cutting-edge technology to provide retail, commercial, and institutional banking services.