a. Contents of Withholding Tax Returns/Payment Schedule:
i. Names of the taxpayers who suffered the deductions
ii. Their addresses
iii. The nature of their activities/services and period covered
iv. Their tax file numbers (Tax Identification Number – TIN)
v. The total amount payable
vi. The rate of tax applied
vii. The amount of tax withheld
viii. The balance paid to the taxpayer
ix. The tax contract for which returns were being made
x. The date of payment
xi. The cheque number and date

b. Time Frame for Compliance with Withholding Tax Returns:

• For companies, withholding tax should be remitted to the Federal Inland Revenue Service (FIRS) within 21 days.
• For individuals, withholding tax should be remitted to the State Internal Revenue Service (SIRS) within 30 days.
• The time frame starts from the date the duty to deduct withholding tax arose or when the withholding tax was deducted, whichever is earlier.

c. Merits and Demerits of Withholding Tax Scheme:
Merits:
i. It is a source of government revenue.
ii. It helps expand the tax net by bringing previously unknown taxpayers into the system.
iii. It helps determine a person’s turnover and ascertains the correct income for tax purposes.
iv. It makes tax payment less cumbersome for taxpayers.
v. It reduces tax evasion.
vi. It is self-accounting, involving little to no cost of collection.
vii. It saves time for revenue officers to focus on other duties.

Demerits:
i. A high withholding tax rate can affect the operational performance of businesses.
ii. The withholding tax system affects the cash flow of businesses as they receive less than expected or budgeted amounts.
iii. It may discourage hard work by revenue officers, as the system is self-accounting in nature.