03/06/2025
‘Disability Relief.’ If a resident individual, or the spouse or child of the individual, is certified by the Ministry of Health as incapacitated by reason of mental or physical infirmity, the individual is allowed a deduction in respect of the individual’s total gross adjusted income equal to Nu 40,000.
Business Income Tax and Corporate Income Tax
Apart from PIT relief, there is also relief for small businesses as businesses no longer need to file a 30% flat BIT on any profit, but they will now have to file a PIT instead which gives them the many benefits and slabs available to PIT payers.
For example, in the current system, if a small shop makes Nu 500,000 profit in a year, then the 30% BIT means a Nu 150,000 tax. Now under PIT the same Nu 500,000 only attracts a Nu 10,000 tax. This will mean much more savings and also improve tax compliance.
Another benefit is that if a same person has two business licenses, like a shop and restaurant, and if the shop makes losses, then losses from the shop can be offset against the profits of the shop. This is because a person with multiple business licenses will have to file a collective PIT which will allow this benefit.
Businesses with Nu 5 mn or above turnover are expected to keep and file books of accounts, but for those under Nu 5 mn like small and micro businesses, there will be a simple formula to calculate tax which is treating 15% of the total income as profit based on international best practices. For example, if a small shop makes Nu 2 mn total revenue in a year as seen in the CD account the profit at 15% will be Nu 300,000 which means no need to pay tax as it comes under the PIT exemption.
A Ministry of Finance official said that the PIT and BIT relief through the various deductions is to firstly help people deal with some of the inflation that will come due to GST, and also put more money in the hands of people so that they can spend or invest.
The Corporate Income Tax (CIT) which was earlier 25% for private
