The Tax Administration Bill currently being debated in Parliament will replace and modernize the current administrative processes in each of the current tax laws to achieve consistency and compliance in the tax administration.
The current tax laws include the Income Tax Act, the Goods Tax Act, the Sales Tax Act and the Stamp Duty Act.
The Bill according to the Finance Minister, Hon. Harry Kuma aims to modernize critical parts of the administration by providing for the use of electronic tax systems, self-assessment and a comprehensive system of rulings to guide taxpayers.
“For the development of our economy, we need to create an enabling environment for our economic and social sectors to grow, ensuring that we promote a fair and transparent tax system that builds also on the trust and mutual respect of both taxpayers and tax administrators,” Kuma said when tabling the Bill in Parliament.
The current tax system is complex and costly to administer as each tax act has its administrative arrangements. These various Acts are not consistent across each of the tax acts with many of their processes are out of date and have not kept up with changes in business or international experience in tax administration, thus limiting the pace of development for this country which necessitates a unified tax administration law.
This new Tax Administration Bill will replace the current administrative processes in each of the current tax laws to achieve consistency and compliance in the tax administration.
This new Tax Administration Bill 2022 will enable the improvement and strengthening of compliance under the current tax system. The Bill will strengthen the powers, functions and duties of the Commissioner and Tax officers of the Inland Revenue Division (IRD).
Minister Kuma outlined ten areas that are anticipated to improve the current tax regime once the bill is passed.
First, the unified tax law will strengthen the administration functions of the Inland Revenue division with the Commissioner to effectively administer the current Tax Acts, Income tax Act, Goods Tax Act, Sales Tax Act and Stamp Duty Act.
Second, to address the inconsistency in current tax laws by aligning all administrative powers of the Commissioner inland revenue powers from all tax legislations.
Third, the Bill by providing for self-assessment for all taxpayers will greatly improve taxpayer compliance since taxpayers will be able to determine their tax liabilities and pays the tax owing at the same time without an assessment being issued. Except at this stage for Income tax.
Fourth, the new Bill legislates Tax Agents, and for the Commissioner to ensure only trusted agents provide tax advice to taxpayers. This would allow those who meet the fit and proper and registered tax agents to do tax work for businesses.
Fifth, the Bill Provides for a legislative basis for the issuing of TINs and penalties for misuse.
Sixth, the Bill ensures that dates to lodge objections and Appeals are made consistent. It provides for the Right to appeal to the Court of Appeal provided for all taxes not just Income Tax.
Seventh, the Bill legislates the systems in place and clarifies the processes that need to be followed across all Acts for recovery of the tax such as departure prohibition notices, and seizure of property. Therefore, those having tax dues would not leave the country before paying their tax dues.
Eighth, with the changing business environment, the Bill take into account computerization, electronic filing and payment which would reduce cost and time to businesses visiting the IRD. This also enables businesses to do lodging electronically.
Ninth, the Bill introduces late payment interest of 15% which will be applied uniformly across all tax acts.
Finally, the Bill provides for making public rulings and introduces binding private taxpayer’s specific rulings as commissioner’s interpretation of specific sections in tax act. This provides certainty for taxpayers in self-assessing their tax affairs.
This Tax Administration Bill, is a positive step forward into the future by ensuring continued improvement on the Tax administration of the country.