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The National Revenue Authority has kicked off the implementation of the new Tax Policy.

In a public notice released last week, the NRA notified all taxpayers and the public that the financial act, 2022/2023 that was passed by the transitional national legislature in September this year has come into force.

According to the amended national tax laws, withholding tax on rental income – deducted by a tenant at source – which has been at the rate of 20%, now applies to the rent plus all associated costs for ancillary services.

These include utilities, cleaning, garbage collection, and security among others.

The policy stipulates persons, including betting companies, who pay lottery and or any other game winning shall withhold personal income tax, or personal income tax (PIT) on the gross payment at the rate of 20% whenever making such payments.

They shall also furnish a return to the national revenue authority by the 15^th day of the month following the month in which the payment was done.

The policy states that government ministries, agencies and departments, banks, insurance companies, international organizations, foreign missions and non-governmental organizations shall, when concluding contracts, making payments or otherwise transacting with any taxpayer, require from such taxpayers a valid tax clearance certificate.

The national revenue authority stated that any person, or an institution that contravenes this provision commits an offense under the taxation act, 2009.

According to the policy, sales tax at the rate of 18% is payable on any commission, fee or charge levied for financial services, cash transfer services or travel and tour agency services.

The financial act 2022/2023 amendments to tax laws have also revised withholding rates for personal income tax on wages.

It stipulates that any person whose monthly income ranges between 5,000 and 10,000 pounds, is required to pay 5% of the earnings.

Those whose monthly income is between 10,000 and 15,000 pounds will 10%.

Meanwhile, any income exceeding 15,000 pounds but does not exceed 20,000 is taxed 15% and beyond 20,000 pounds is taxed 20%.

The NRA also introduced income tax on gross turnover for entrepreneurial activities by individuals with annual audited financial statements.

It stated that those whose turnovers are between 2m and 4m pay taxable fees of 200, 000 pounds, while turnovers between four million pounds and seven million pounds are taxed 400, 000 pounds and those exceeding seven million pounds will be taxed 800,000 pounds annually.

The national revenue authority also stated that all tax returns are due on 15^th November 2022.

NRA asserts that taxpayers must comply with the tax laws as amended by the financial act, 2022/2023.