Remission of Interest on late payment of income tax

Legal Notice 361 of 2013 introduced the possibility of the remission of interest charged with respect to late payment of the tax liability by the Commissioner of Inland Revenue in terms of Article 44(2A) of the Income Tax Management Act.

Remission of Interest

The Commissioner, may at his discretion, remit wholly or in part any interest chargeable on any person with respect to late payment of the tax liability, if it deems that late payment is due to a reasonable cause.

In the case were a remission is conceded, the Commissioner may impose certain conditions which will be communicated to the person concerned in writing.  Mainly, that the person concerned must not make a default or omission within such period as the Commissioner may establish or that the person must make a payment of tax within time frames stipulated by the Commissioner.  Infringement of the conditions stipulated by the Commissioner will result in the remission of interest to be forfeited.

The use of the Commissioner’s discretion with respect to the above shall not be questioned in any appeal.

Interest will not be incurred on the outstanding tax liability which is being paid by means of an agreed payment plan not exceeding two years, from the date the concerned person enters into such a payment plan.  Infringement of any compliance obligations under the payment plan will result in the remission of interest to be forfeited.

Set off against interest receivable

The Commissioner reserves the right to deduct any interest it remitted with interest on any refund of tax due to the person concerned within six years from the date the remission of interest under these rules had taken place.