Withholding Tax

Although income tax is a direct tax, in certain circumstances the payer has the responsibility to withhold the tax (ITA 1967) when making payment to the non-residents. Failure to do so, the payer will suffer penalties and be prohibited from claiming a tax deduction against his own income for the payment to the other party. The scope of these withholding taxes is ever-evolving – both at the domestic level and international level. Ignorance is no excuse and it is imperative for any person managing the day-to-day payments and accounts of a business to understand their obligations under the withholding tax provisions, and the cost of non-compliance.

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