This Information Sheet (‘IS’) sets out the Commissioner’s practice for imposing penalties under our tax laws (Tax Administration Act 2012 and VAGST Act 2015) where a taxpayer has failed to comply with requirements under those said laws.
This IS does not cover all the details of the relevant tax laws, except the basic obligations of taxpayers to comply under each law; and the penalties imposed if those tax obligations are not complied with
The main responsibility for meeting your tax obligations in accordance with the law lies with you, the taxpayer. It cannot be transferred to a third party, such as tax agent. E.g. If the tax agent fails to file your return, you are held responsible, not the tax agent (see: section 41(9) of the Tax Administration Act 2012)
As a Taxpayer, you have certain legal obligations you must fulfil, and are expected to meet certain standards when managing your tax affairs.
Set out below are the due dates for filing tax returns and due dates for paying applicable tax:
|VAGST||PAYE||Provisional Tax||Income Tax|
|Tax Return Filing Due Date||21st of every month [bi-monthly filing]||15th of every month [monthly filing]||N/A||3 months after the end of tax year [annual filing]|
|Payment Due Date||Same as due date for filing but subject to a grace period of 30 Days||Same as due date for filing but subject to a grace period of 30 Days||31st March, 31st July & 31st October but subject to a grace period of 30 Days [3 instalments on an annual basis]||Same as due date for filing but subject to a grace period of 30 Days|
Our tax laws are designed to set out clearly all of your legal obligations, so as to encourage voluntary compliance. Voluntary compliance is when you choose to meet your tax obligations on time or before the due dates, on your own accord without any intervention by the Ministry. This would include, you as the Taxpayer:
Amount of tax shortfall imposed
Section of TAA
% of Tax Shortfall
Knowingly / Recklessly
Any other case
Without knowledge / not reasonably expected to have knowledge
Reasonably arguable position
What qualifies as a statement made to a tax officer?
How much is the penalty?
PERCENTAGE OF PENAL TAX
Taxpayer provided reasonable grounds for deficiency found
First application of the Penal Tax section (section 47) and absence of reasonable grounds provided by taxpayer
Second application of section 47 and absence of reasonable grounds provided by taxpayer
Third application of section 47 and absence of reasonable grounds
4th application or continuous application of the section 47; or
In any case where in the opinion of the Commissioner there has been a deliberate omission or error by the taxpayer to evade
revenue of government