On 14 August 2019, the Federal Inland Revenue Service (FIRS) issued a Public Notice (the FIRS Notice) in Nigerian
newspapers, titled “…Deduction at Source of Withholding Tax (WHT)/Value Added Tax (VAT) on Compensation Paid
to Agents, Dealers, Distributors and Retailers by Principal Companies”. The FIRS Notice stated: “It has come to the
notice of the Service that some companies do not deduct WHT/VAT from the compensation paid to their distributors
contrary to the provisions of the Companies Income Tax (Rates, Etc. Deduction at Source (Withholding Tax) Regulations
S.I 10 1997 and Paragraph 3.8 of [FIRS] Information Circular 2006/02 of February, 2006, which states that ‘commission
earned by distributors/dealers will be subjected to WHT and VAT.’ ”¹
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