Tax Term
What is Withholding Tax?
Tax deducted at source before you receive payment.
Detailed Explanation
Certain payments have tax deducted before you receive them. This includes interest on savings, dividends, and some professional fees. The withheld amount is credited against your final tax liability.
Example
Bank interest of ₦100,000 may have ₦10,000 withheld as tax before crediting your account.