Happy New Year from all of us here at Ronalds LLP!
We wish to bring to attention several key tax matters that will affect all taxpayers in the year 2021.
These include the tax changes that were introduced last year by the Finance Act of 2020 and the Tax Laws (Amendment) No. 2 Act of 2020, intended to take effect from 1st January 2021.
Please note however that this tax alert is meant to provide guidelines and does not constitute tax advice
TAX CHANGES WITH EFFECT 1ST JANUARY 2021
REINSTATEMENT OF THE TAX RATE
The corporate tax rate has been reinstated from 25% to 30% effective 1st January, 2021.
A new tax known as minimum tax was introduced at the rate of 1% on gross turnover for entities. This was effective 1st January 2021.
Minimum tax is a base tax which is payable on instalments and shall be due on 20th day of the 4th, 6th, 9th and 12th month of the year of income, just as the case for instalment taxes.
Instalment tax and minimum tax shall be applicable concurrently. Where installment tax is higher than the minimum tax, then installment tax shall be payable in that particular installment, whereas, where the minimum tax is higher than the installment tax, then minimum tax shall be payable in that particular period.
The following category of income shall be exempted from Minimum Tax deductions;