Understanding the Minimum Tax

Minimum tax is set to come into effect from January 01, 2020. This new tax shall be payable by individuals and businesses irrespective of whether they make a profit or not. The rate for the minimum tax shall be 1% of the gross turnover by the individual or company.

The tax shall be filed and paid in installments. This tax shall be due on the 20^th day of each period ending on the 4^th, 6^th, 9^th, and 12^th month of the year of income.

After self-assessment, an individual or business will determine which is higher between the installment tax and minimum tax. The higher of the two will form the tax payable for the year.

There are however some incomes that are exempted from minimum tax. These are:-

• Employment income
• Income that is subject to the Residential Income Tax
• Income that is subject to the Turnover Tax
• Income that is subject to Capital Gains Tax
• Income from Extractives Sector
• Any other income exempted by the Act

Please contact us at Nelkins Consulting & Outsourcing for more tax solutions to fully utilize the tax-saving opportunities available and to counter tax risks associated with the minimum tax