Withholding VAT

Question 1

Section 42A Tax procedures Act

What is the rate of withholding?

Answer 1

2% of the taxable value

Question 2

Exemption from withholding?

Answer 2

zero rated supplies

taxable supplies for official aid funded projects

exempt supplies

Question 3

When is the tax withheld due?

Answer 3

on or before 20th day of the month following the month of deduction

Question 4

Offences related to withholding tax?

Answer 4

failure to withhold the whole amount of tax

failure to remit the amount withheld

Question 5

What is the penalty for failure to remit withholding VAT?

Answer 5

10% of the tax

Question 6

What is the late payment of interest penalty

Answer 6

1% p.m on unpaid sums

Question 7

Time period for lodging Refunds of withholding

Answer 7

24 months from the date the tax became due

Question 8

Obligations of supplier to withholding VAT agent

Answer 8

issue valid tax invoice

file monthly VAT returns showing output tax position