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Tax collector targets company Directors to boost revenue
Company Directors are set to have their pockets hit as BURS goes in search of new revenue.
According to experts, the amendment of the Income Tax is to ensure Directors pay more tax on their dividends.
Currently, big-earning Directors are taxed up to 25 percent of their annual income while their dividends have escaped largely unscathed.
However, depending on whether they reside locally or not, as of July, new measures will see them cough up as much as 15 percent of their Director’s fees.
Residents will pay withholding tax at 10 percent whilst non-resident Directors will be charged an additional five percent.
Jonathan Hore
Although it is not yet official, a recently leaked government communiqué indicates there will be an increase in the income tax threshold from the 1st of July this year.
It means anyone whose monthly earnings are P4, 000 or less will not have to pay income tax. The present cut-off point is P3, 000.
Further breaking it down for Voice Money, Managing Tax Consultant at Aupracon Tax Specialists, Jonathan Hore explained, “To those who pay tax, it will reduce tax a bit as the non-taxable threshold increases to P48, 000 from the current P36, 000.”
He noted such a move effectively recognizes that the P3, 000 per month, in place since 1 July 2011, was now too low.