Taxation System
Historical Background
Before 1960:- Taxes were collected in kind and in form of Labour contribution. Taxes in kind were gradually phased out to be replaced by nominal monetized tax on:
- Land
- Property
- Business income and
- consumption of good and services
First Major Tax Reform in 1989
Purpose:
- To take stock of various tax measures
- To develop a coherent and rational tax system
- To establish a system of tax in fair, equitable and efficient manner that minimises the need for frequent change.
- To fully document the system in a way that promotes tax payer awareness
Main features:
- BIT on net profit replaced 2% turnover tax
- Export income exempted
- Plant machinery exempted from sales tax and import duty other nuisance taxes were abolished
Tax Reform in 1992
Purpose:
- Rationalisation of tax structure
- Expansion of tax base
- Simplification of administrative procedures for compliance and transparency