It's a tax imposed on the net profits of companies and commercial, industrial, and service entities, as per the Income Tax Act 1986 and its amendments. The rate is determined based on the type of activity, and it's paid annually after deducting allowable expenses. It aims to finance public services, regulate the market, and encourage economic development.
Procedure in case of non-filing of the tax return
If a person does not file a return of their earnings, whether the Secretary General has requested it or not, and the Secretary General deems that the person is subject to tax, he may, as he deems appropriate, assess the value of that person's earnings and subject them to tax.
The Secretary General shall be entrusted with implementing the provisions of this Act and collecting the tax levied thereunder.
Imposing tax on the agent: Profits of a non-resident person may be assessed and tax imposed on their agent.
Imposing tax on the donor: Without prejudice to Article 6, tax is imposed on profits from gifts and donations on the donor.
Imposing tax on the executor, etc.: Profit accrued or received before the deceased's death is subject to tax, assessed as if they hadn't died, and the tax is imposed on the executor, administrator, or heirs at the same rate as if they hadn't died.
Imposing tax on a person assessed for another's profits: A person assessed for another's profits and taxed accordingly must comply with all relevant requirements and is responsible for paying the tax due, limited to any assets of the other person in their possession at or after notification of assessment.
No capital asset may be registered or transferred without a clearance certificate from the Secretary-General, confirming payment of the tax due on that capital asset.
The Secretary-General shall assess the profits of any person subject to tax as soon as possible after the period for submitting the return has expired.
Powers of the Secretary-General upon submission of the return:
When a person submits a return of their profits, the Secretary-General may:
(a) Accept the return and assess their profits accordingly.
(b) If there's reason to believe the return is incorrect, estimate the person's profits as deemed fit, and may consult assessment committees appointed for this purpose, whose opinion is advisory.
Tax shall be paid on the total capital gains, upon assessment, at the rates specified in Schedule II of this Act.
The gain subject to tax shall be determined after deducting the following amounts from the sale price of the capital asset:
(a) The purchase value or construction cost of the capital asset;
(b) Costs of improvements made to the capital asset during the period of ownership;
(c) Expenses related to the sale of the capital asset;
(d) Any amount paid as price differences in accordance with the Urban Planning and Land Disposal Act of 1994;
(e) Any other expenses as may be specified by the regulations.
(1) Any person who contests an assessment issued under the provisions of this Act may appeal such assessment by submitting a written notice to the Secretary General within thirty days from the date of the assessment. The notice shall not be considered valid unless it clearly states the grounds for the objection.
(2) If the appellant does not accept the decision of the Secretary General, they have the right to appeal to the Income Tax Committee within thirty days from the date of notification of the decision, provided that they pay 25% of the assessed tax amount or such amount as the Secretary General may deem appropriate.
The Secretary General or the aggrieved party may appeal the decision of the Income Tax Committee to the competent court for administrative appeals within thirty days from the date they become aware of the decision.
The following shall be exempted from tax:
Provisions of Chapter 15 of the Income Tax Act 1986 regarding offenses and penalties apply as if the tax imposed under this law were income tax.
The following are exempt from tax:
(a) Profit made by the national government, state governments, local governments, or public bodies from selling a capital asset.
(b) For an individual, 25% of the sale value of a single house or plot acquired through a housing scheme is exempt if replaced with another house or plot within a year, without repeat exemption during their lifetime.
(c) Profit from selling properties of religious, educational, or social institutions.
(d) Revaluation of assets contributed by individuals or companies as in-kind shares in companies, provided the corresponding shares aren't disposed of for at least 4 years; if sold earlier, capital gain is calculated based on the asset's value before revaluation.
If any person incurs losses in any year from the sale of property subject to tax under this Act, the value of such losses shall be carried forward and deducted when calculating the taxable gains in the following year. However, these losses may not be carried forward for more than three years from the end of the year in which they occurred.
If the capital gains of any person are subject to tax under the provisions of this Act, those gains shall be assessed against that person, and the tax shall be levied accordingly.
Procedure in Case of Non-Filing of Return
If a person fails to submit a return of their gains—whether or not the Secretary General has requested it—and the Secretary General believes that the person is subject to tax, he may assess the value of the person’s gains as he sees fit and impose the corresponding tax.
Procedure in Case of Non-Payment of Tax at the Time Fixed
Where the tax is not paid at the fixed time, the Secretary General may apply the provisions of Chapter XIV of the Income Tax Act, 1986, as if the tax levied under the provisions of this Act were income tax.
The provisions of Chapter XV of the Income Tax Act, 1986
relating to offences and penalties, shall apply, as if the tax
levied, under the provisions of this Act, is an income tax. 19
When a person submits a return of their gains, the Secretary General may:
(a) Accept the return and assess the gains based on it;
(b) If he has reason to believe that the return is inaccurate, he may assess the person's gains as he sees appropriate. He may also seek assistance from evaluation committees he appoints, if deemed necessary. The opinion of these committees shall be consultative.
