FINANCE ACT 2023: ARE YOU ELIGIBLE FOR TAX AMNESTY?

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The Finance Act, 2023 (“The Act”) unpacked a lot of changes to the tax laws that have impacted the taxpayers.

One such introduction to The Act was the Remission of the penalties and interest.

The Act had removed the Section pertaining to Waiver on Penalties and Interest and therefore it is of utmost importance that all taxpayers with outstanding principal tax take advantage of this Amnesty.

We answer below the most Frequently Asked Questions.

FAQ 1: How long is the period for the amnesty and what tax liabilities will it cover?

The tax amnesty will run from 1st September 2023 to 30th June 2024 and shall cover all tax heads under tax laws covered in the Tax Procedures Act, 2015 as highlighted below:

The Income Tax Act
The Value Added Tax Act
The Excise Duty Act
The Miscellaneous Fees and Levies Act

FAQ 2: Who is eligible to apply for the amnesty?

A person who has no principal tax owing for the periods up-to December 2022 but may have penalties & interest in the system.
A taxpayer with outstanding principal debt as at 31st December 2022, provided that the principal tax amount is settled by 30th June 2024.

Exclusions from the Amnesty

A taxpayer who has penalties and interest imposed under Sec 85 of the tax procedures act 2015 (Tax Avoidance}.
All penalties and interest relating to tax debts accrued for the periods after 31st December 2022, shall not qualify for the amnesty.

FAQ 3: What happens if the taxpayer is unable to pay the principal tax by 30th June 2024?

If the taxpayer is unable to discharge his payment plan by the 30th of June all penalty and interest accrued on unpaid principal tax will be chargeable.

FAQ 4: What is the correct procedure to apply for the amnesty?

Apply online from the taxpayers account if you are eligible.

The online portal will indicate all the tax heads that have pending liabilities, the taxpayer will select the periods and the tax heads that qualify for the amnesty.

Taxpayers can then clear the full tax debt, or agree with the commissioner to pay by a payment plan.

Taxpayer will have to adhere to the installment payment frequency as per the agreed payment plan.

The payment plan will not exceed beyond 30th June 2024 and any unpaid balance of tax will not qualify for the amnesty.

By accepting the terms and conditions of the amnesty, the taxpayer commits to honoring the payment plan agreement.

Amnesty shall be granted upon the payment of the final instalment as committed in the payment plan agreement.

POINTS TO NOTE:

The Law allows for payment of balance of tax by 30th April 2023 for a person whose year-end is December 2022. Therefore, interest and penalties in relation to principal tax due for the year ended 31st December 2022 are eligible for the amnesty.

Tax point for monthly taxes for December 2022 period falls on any day in the month of December 2022. The law however allows payment to be deferred up to the subsequent month on specified due dates.

Therefore, interest and penalties in relation to principal taxes due for the Month of December 2022 are eligible for amnesty.