Withholding Tax

Withholding tax (WHT) is a form of income tax that is withheld at source by one person (withholding agent) upon making payment to another person (payee). This tax is deducted at source and remitted to URA in advance by the withholding agent.

The law stipulates the persons who are required to withhold the tax and the persons from whom the tax is withheld. This depends on the nature and the circumstances of the transaction.

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A withholding agent also known as a player is a person legally obliged to withhold tax on payment.


A payee is a person from whom tax is withheld before being paid.


A person includes an individual, a partnership, a trust, a company, a retirement fund, a Government, a political subdivision of government and a listed institution.

A withholding agent is a person legally obliged to withhold tax on payment. To become a withholding agent, one must;

  • Be on the list of selected / designated withholding agents published by the Minister of finance in a gazette or
  • Be making a payment on a transaction that is subject to WHT by law.

NOTE: Withholding taxes may be final or creditable;

Final: Under the final withholding tax system, the amount of income tax withheld by the withholding agent is constituted as a full and final payment of the income tax due from the payee on the said income and

  1. The payee will not be subjected to further tax on such income
  2. The payee is not required to file an income tax return for the particular income that has faced final withholding tax
  3. That income is not aggregated with the other income of the taxpayer for the purposes of ascertaining chargeable income;
  4. No deduction is allowed for any expenditure or losses incurred in deriving the income and;
  5. No refund of tax shall be made in respect of the income.

Creditable: Under the creditable withholding tax system, taxes withheld on certain income payments are advance tax payments which are offset against a final tax liability in an assessment for a particular year of income. The payee may be required to file an income tax return to report the income and/or pay the difference between the tax withheld and the tax due on the income.

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