Finance Act 2023 Tax Amnesty on Penalty and Interest Relating to Tax Debts

The Finance Act 2023 introduced a tax amnesty on penalty and interest relating to tax debts. Here is what you need to know about this amnesty:

Effective date:  This amnesty is effective from 1^st September 2023 and will run up to 30^th June 2024.

Who is eligible

It is applicable to all taxpayers as follows:

1. Tax payers who have settled all principal taxes which were due by 31^st December 2022 will receive an automatic waiver of all penalties and interest; and
2. Taxpayers with accrued principal taxes up to 31^st December 2022 will be required to propose a payment plan of settling the outstanding amounts before 30^th June 2024 and make an application for amnesty on the penalties and interest. The amnesty will only be granted once a person has submitted an application and settled all the outstanding principal taxes.

Further the Finance Act, 2023 introduced the below provisions, which were coming into effect as from 1^st September 2023:

1. Introduction of Digital Service Tax at the rate of 3% on the transfer or exchange value of the digital asset;
2. The Commissioner to introduce an electronic system through which electronic tax invoices may be issued and records of stocks kept. Going forward all tax invoices should be generated through this system failure to which a penalty of two times the tax due shall apply;
3. The Commissioner to introduce a data management and reporting system through which electronic documents including detailed transactional data of taxpayers can be submitted; and
4. Introduction of export and investment promotion levy on certain imported goods (cement clinker, bars and rods, uncoated kraft paper, sacks and bags etc.) as specified in the third schedule of the Miscellaneous Fees and Levies Act, 2016.

Get in touch with our tax service team for further clarification on the tax amnesty and any other tax matters.