IRC decision increases salary, wages tax

Business

THE salary and wage tax (SWT) increased to about K30 million per month when the Internal Revenue Commission (IRC) made a decision to stop the practice of using goods and services tax (GST) to offset SWT liabilities.
IRC commissioner general Sam Koim provided these details yesterday when commenting on impacts of the decision they made towards the end of last September.
“Since the migration from the revenue accounting system (RAS) to the standard integrated government tax administrative system, unverified GST credits were allowed to be offset against salary and wages tax,” he said.
“A year prior to Sept 24, 2019, K1.2 billion of unverified GST credit offsets were done.”
However, last Sept 24, a circular was issued by the commissioner general to all IRC staff to cease the use of GST credits to offset SWT liabilities.
“Supplementing that, all taxpayers requiring GST credit offsets against other taxes to provide a supplier’s list detailing all their suppliers and invoices,” Koim said.
He said a month after he took office, sometime towards the late September, they made a decision to switch off a practice of offsetting, unverified GST credits salaries, wages tax and all these.” Koim said this brought good results.