INCOME TAX & VAT PENALTIES
Refund of Penalties imposed by the VAT and the
Income Tax Departments
Context: 93/92% VAT & IT compliance re.
submissions of tax declarations for VAT & Income Tax, payment settlements.
Current Penalty System: automatic penalty
system triggered off on a first VAT / Income Tax contravention.
Measure: Law-abiders who default in
extraordinary circumstances will be admonished and will only be penalised on
Penalty on Duty on Documents:
discrepancies between contractual value of property & value determined by
Current Penalty System: A penalty of ten
times more the duty saved by the amount under-declared.
Measure: Reduction to twice the same
duty evaded; further gradual reduction of penalty according to timeliness of
Outstanding Balances from
VAT 1995 & from CET
Aim: To facilitate settlement by taxpayers
of outstanding balances under the VAT 1995 & CET.
Measure: Reduction of c.15,000 assessments
(Lm4.6 million in penalties) & reduction of penalties on a percentage scale
linked to settlement time frame.
(interests due on outstanding tax are not
Current System: Businesses declaring
unexpected year-end profits which have not been declared for provisional tax
purposes (due in April and in August), incur a penalty + interests for a whole
Measure: The penalty & interest on profits
realized during the last four months of the year, which are not normal seasonal
profits, will be calculated on 4 months not 1 year.
Aim: To help businesses' cash flows.
Measure: VAT refunds due to an enterprise
providing exempt goods & services, will be made:
Budget 2003 Index