The Income Tax (Amendment) Act, 2023 has introduced a minimum chargeable income provision which requires businesses that have declared losses for the previous five years of assessment to assess and pay tax on a minimum chargeable income of 5% of turnover.

Minimum chargeable income tax paid is not a qualifying deduction for tax purposes.


Exemption from the minimum chargeable income requirement.

  1. Businesses within the first five years of commencement of operations; and
  2. Farming businesses.

Financial implication of the amendment for businesses.

Businesses may be subject to tax even if losses are being made. The minimum chargeable income tax regime is considered unfair, since it amounts to flogging a medical patient in an intensive care unit.

Notwithstanding the sentiments echoed by taxpayers and tax experts alike, taxpayers are encouraged to comply with the law to avoid sanctions and other repercussions.


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