WHT Certificate Generation in Nigeria: Step-by-Step Guide

When you deduct Withholding Tax from a payment, you're legally obligated to provide the recipient with a WHT credit certificate (also called a credit note). This document is crucial—it allows the recipient to offset the WHT against their income tax liability. This guide explains how to generate proper WHT certificates.

What is a WHT Credit Certificate?

A WHT credit certificate is an official document that:

• Confirms WHT was deducted from a payment
• States the amount of tax withheld
• Identifies both the payer and the recipient
• References the payment and transaction details
• Serves as proof for the recipient's tax credit

The recipient uses this certificate to claim credit against their Company Income Tax (CIT) or Personal Income Tax (PIT) liability.

Why WHT Certificates Matter

For the Payer (You)

• Legal compliance requirement
• Proof of proper deduction
• Supports your WHT return filing
• Audit documentation

For the Recipient (Your Supplier)

• Tax credit evidence
• Reduces final tax liability
• Required for tax return filing
• Cash flow documentation

Required Elements of a WHT Certificate

Every WHT credit certificate must contain:

1. Payer Information

• Company name
• Address
• Tax Identification Number (TIN)
• VAT registration number (if applicable)

2. Recipient Information

• Company/individual name
• Address
• Tax Identification Number (TIN)

3. Certificate Details

• Unique certificate number
• Date of issue
• Tax year/period

4. Transaction Information

• Description of payment
• Gross amount paid
• WHT rate applied
• WHT amount deducted
• Net amount paid

5. Authentication

• Authorized signature
• Company stamp/seal
• Contact information

Sample WHT Credit Certificate Format

═══════════════════════════════════════════════════════════════
WITHHOLDING TAX CREDIT CERTIFICATE ═══════════════════════════════════════════════════════════════
Certificate No: WHT/2025/0001 Date of Issue: January 20, 2025 Tax Year: 2025
─────────────────────────────────────────────────────────────── PAYER DETAILS ─────────────────────────────────────────────────────────────── Company Name:    ABC Manufacturing Limited Address:         15 Industrial Avenue, Ikeja, Lagos TIN:             12345678-0001 VAT Reg No:      12345678-0001
─────────────────────────────────────────────────────────────── RECIPIENT DETAILS ─────────────────────────────────────────────────────────────── Company Name:    XYZ Consulting Limited Address:         42 Marina Road, Lagos Island, Lagos TIN:             87654321-0001
─────────────────────────────────────────────────────────────── TRANSACTION DETAILS ─────────────────────────────────────────────────────────────── Invoice Reference:    INV-2025-0042 Invoice Date:         January 15, 2025 Description:          Management Consulting Services
Gross Amount:                             ₦1,000,000.00 WHT Rate Applied:                         10% WHT Amount Deducted:                      ₦100,000.00 Net Amount Paid:                          ₦900,000.00
─────────────────────────────────────────────────────────────── CERTIFICATION ─────────────────────────────────────────────────────────────── We hereby certify that the above-stated amount of ₦100,000.00 (One Hundred Thousand Naira) has been deducted as Withholding Tax and will be remitted to the Nigeria Revenue Service (NRS).
Authorized Signatory: _____________________ Name:                 Chief Financial Officer Date:                 January 20, 2025
[COMPANY STAMP]
─────────────────────────────────────────────────────────────── This certificate should be retained for tax purposes. For inquiries: finance@abcmanufacturing.com | +234-XXX-XXXX ═══════════════════════════════════════════════════════════════

Step-by-Step Certificate Generation

Step 1: Identify the WHT Deduction

When you make a payment that requires WHT:

Item	Example
Supplier invoice	₦1,000,000
VAT on invoice	₦75,000
WHT rate	10%
WHT amount	₦100,000
Net payment	₦975,000

Step 2: Record the Transaction

In your accounting system:

• Record the full invoice amount
• Post WHT to liability account
• Record net payment to supplier

Journal Entry:

Debit:  Consulting Expense      ₦1,000,000
Debit:  Input VAT               ₦75,000 Credit: Accounts Payable        ₦975,000 Credit: WHT Payable             ₦100,000

Step 3: Generate the Certificate

Create the certificate immediately after payment:

• Assign unique certificate number
• Complete all required fields
• Verify accuracy

Step 4: Issue to Recipient

• Send original to supplier (email or physical)
• Keep copy for your records
• File with transaction documentation

Step 5: Track for Remittance

• Include in monthly WHT return
• Remit WHT to NRS by the 21st
• Reconcile certificates issued vs WHT remitted

Certificate Numbering System

Best Practices

Use a systematic numbering approach:

Format: [Prefix]/[Year]/[Sequential Number]

Examples:

• WHT/2025/0001
• WHT/2025/0002
• WHT/2025/0003

Tips for Numbering

• Start fresh each year
• Never reuse numbers
• Don't skip numbers
• Document voided certificates

Timing of Certificate Issuance

When to Issue

Scenario	Timing
Single payment	At time of payment
Milestone payments	With each milestone
Monthly retainer	Monthly, with payment
Year-end adjustment	When adjustment made

Deadline

Issue certificates promptly—ideally within 7 days of payment. Delayed certificates cause problems for recipients' tax filings.

Multiple Payments to Same Supplier

Option 1: Certificate per Payment

Issue a separate certificate for each payment:

• ✓ Clear audit trail
• ✓ Easy to match to invoices
• ✗ More paperwork

Option 2: Consolidated Monthly Certificate

Issue one certificate summarizing all payments in a month:

• ✓ Fewer documents
• ✓ Administrative efficiency
• ✗ May be harder to reconcile

Consolidated Certificate Format Addition:

───────────────────────────────────────────────────────────────
TRANSACTION SUMMARY ─────────────────────────────────────────────────────────────── Date        Invoice      Description              Gross       WHT ─────────────────────────────────────────────────────────────── 05-Jan-25   INV-0041    IT Support              ₦200,000    ₦20,000 15-Jan-25   INV-0045    Network Maintenance     ₦150,000    ₦15,000 25-Jan-25   INV-0048    Software Update         ₦100,000    ₦10,000 ─────────────────────────────────────────────────────────────── MONTHLY TOTAL                                   ₦450,000    ₦45,000 ───────────────────────────────────────────────────────────────

Common Certificate Errors

Error 1: Wrong Recipient TIN

Problem: TIN doesn't match recipient's actual TIN Impact: Recipient cannot use certificate for tax credit Solution: Verify TIN before issuing; request TIN confirmation

Error 2: Incorrect WHT Amount

Problem: Certificate shows different amount than actually deducted Impact: Reconciliation issues; audit problems Solution: Double-check calculations before issuing

Error 3: Missing Certificate Number

Problem: Certificate lacks unique identifier Impact: Difficult to track and reference Solution: Always use sequential numbering system

Error 4: Wrong Tax Year

Problem: Certificate shows incorrect year Impact: Recipient credits to wrong tax period Solution: Verify year matches payment date

Error 5: Late Issuance

Problem: Certificate issued months after payment Impact: Recipient's tax planning affected Solution: Issue within 7 days of payment

Void and Correction Procedures

Voiding a Certificate

If you need to cancel a certificate:

1. Mark original as "VOID"
2. Keep voided copy in records
3. Issue corrected certificate with new number
4. Note reference to voided certificate

Void Notation:

VOIDED
Certificate No: WHT/2025/0005 Void Date: January 25, 2025 Reason: Incorrect WHT rate applied Replacement: WHT/2025/0008

Correcting Errors

For minor corrections:

• Issue amended certificate
• Clearly mark as "AMENDED"
• Reference original certificate number
• Explain the correction

Record Keeping Requirements

Payer Records (You)

Keep for at least 6 years:

• Copy of all certificates issued
• Supporting invoices and payments
• WHT return submissions
• Remittance receipts

Recipient Records

Recipients should keep:

• Original certificate
• Supplier's invoice
• Payment proof
• Tax return where credit was claimed

Digital vs Physical Certificates

Physical Certificates

• Traditional format
• Requires signature and stamp
• Posted or handed over
• Original retained by recipient

Digital Certificates

• PDF format with digital signature
• Email delivery
• Equally valid if properly formatted
• Easier to manage and retrieve

Most businesses now use digital certificates for efficiency.

Reconciliation Best Practices

Monthly Reconciliation

Check	Action
Certificates issued = WHT deducted	Match all transactions
Certificate numbers sequential	Identify gaps
Total WHT = Remittance	Reconcile to payment

Year-End Reconciliation

Check	Action
All certificates accounted for	Review register
No duplicates	Check numbers
Matched to returns	Verify submissions

How Finora Automates WHT Certificates

Finora makes certificate generation effortless:

Automatic Generation

When you record a payment with WHT:

• Certificate is generated automatically
• All fields populated from transaction
• Unique number assigned

Professional Format

• NRS-compliant template
• Your company branding
• All required elements included

Easy Issuance

• Email directly to supplier
• Download PDF for records
• Track delivery status

Complete Tracking

• Certificate register maintained
• Linked to payments and returns
• Searchable by supplier, date, amount

Reconciliation Support

• Compare certificates to deductions
• Match to WHT returns
• Identify discrepancies

Frequently Asked Questions

Can I issue one certificate for the whole year?

Not recommended. Certificates should be issued at the time of payment or at least monthly. Annual certificates make reconciliation difficult and delay recipients' tax credits.

What if the supplier disputes the WHT amount?

Review the invoice and payment. If you deducted correctly, explain the calculation. If you made an error, void the certificate and issue a corrected one.

Do I need to issue certificates to foreign suppliers?

Yes. Non-resident recipients also need documentation of WHT deducted, especially if they're claiming treaty benefits.

What if I don't have the supplier's TIN?

Request it. TIN is essential for valid certificates. Without it, your certificate may not be usable by the recipient.

Can recipients claim credits without certificates?

Generally, no. NRS requires certificates as proof of WHT deduction. Some recipients may face assessment if they claim credits without supporting certificates.

Conclusion

WHT credit certificates are a critical compliance document. They protect both you (proving proper deduction) and your suppliers (enabling tax credits). Getting the format right, issuing promptly, and maintaining good records ensures smooth compliance for everyone.

Finora automates the entire process—from calculating WHT to generating professional certificates and tracking them through remittance.

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