Worldwide: Global Expansion Update - September 2018

Last Updated: 24 September 2018
Article by SKP  

We are pleased to present the September issue of SKP Global Updates – our newsletter that covers employment, payroll, Goods and Services Tax (GST)/Value Added Tax (VAT) and Corporate Tax related developments globally.

The key highlights of this issue include, Minimum and Maximum National Pensions Fund (NPF) and National Savings Fund (NSF) Contribution – Notice to Employers in Mauritius, New Increase in Retirements, Pensions, and allowances in Argentina, New Compliance - Payday filing in New Zealand and Post graduate loans in UK.

Ghana

Ghana VAT Rate Restructured to 12.5% and Increase in Rate has been Abandoned

It is confirmed that the rise in VAT rate has been abandoned, and has been restructured to 12.5%. The National Health Levy of 2.5% from the combined rate of 15% has been split out. The rate was increased, in the past, from 12.5% to the current 15% in January 2014.

The rise of the VAT rate from 15% to 17% has been abandoned.

Personal Income Tax Rates Amended

The Parliament of Ghana has passed the Income Tax (Amendment) Act, 2018. The Act came into force on 1st August 2018 and assented by the President on 31 July 2018.The Act was assented by the President on 31 July 2018 and came into force on 1 Aug 2018.

It has been enacted to include a sixth income tax band for individual chargeable income above GHS120,000 per annum. This band will be subject to tax at the rate of 35%. The rate applicable to a non-resident individual for a year of assessment has also been increased to 25%.

Mauritius

Minimum and Maximum NPF and NSF Contribution – Notice to Employers

Employers are hereby informed that the minimum and maximum basic wage on which contributions to National Pensions Fund (NPF) and National Savings Fund repayable, have been reviewed as follows:

Pay Period

Minimum Basic Wage (MUR)

Maximum Basic Wage (MUR)

For private household employees

For other employees

For all employee

Daily

65

103

672

Weekly

391

618

4032

Fortnightly

782

1237

8063

Half- monthly

848

1340

8735

Monthly

1695

2680

17470

The effective date of the new minimum and maximum NPS/NSF contributions is 1 July 2018. Employers who have already submitted their NPF/NSF return for the month of July 2018 with the previous maximum basic wage applicable are required to submit an amended return and pay the NPF/ NSF underpaid.

For more information, click here.

Income Tax – Pay As You Earn (PAYE) Income Year 2018-2019

Recently, various changes have been made with respect to the PAYE system. Following are the significant changes as per the update.

  • Individuals having an annual net income not exceeding MUR 650,000 in an income year are now taxable at the reduced rate of 10%. Those deriving more than MUR 650,000 will continue to be taxed at 15%.
  • For determining the applicable tax rate, an employer should calculate, for each month, the average cumulative emoluments of the employee by dividing his cumulative emolument by thenumber of pay periods to which it relates. Where the average cumulative emolument in a month does not exceed MUR 50,000 the reduced tax rate of 10% should be applied and 15% when it exceeds MUR 50,000;
  • An employee may, depending on his average cumulative emoluments, suffer PAYE tax deductions at 10% in one month and 15% in another. When shifting from a tax rate of 10% to 15%, an employee will have to catch up on tax underpaid in preceding pay periods. However, a ceiling applies to limit tax deductions under PAYE in a month to 15 % of an employee's salary;

All categories of Income Exemption Threshold have increased by MUR 5,000 as follows:

Category

Amount in Rupees

Individual with no dependent

305,000

Individual with one dependent

415,000

Individual with two dependents

480,000

Individual with three dependents

525,000

Individual with four or more dependents

555,000

Retired/disabled person with no dependent

355,000

Retired /disabled person with dependents

465,000

  • Additional IET (full form?) for children following undergraduate course;
  • Deduction of MUR 135,000 or the amount of tuition fees paid up to a maximum of MUR 175,000if the child is studying in Mauritius. MUR 200,000 if the child is studying outside Mauritius;
  • A retired person who derives emoluments not exceeding MUR 50,000 in an income year, is now entitled to claim IET category F or G, as applicable;
  • In case an individual has, in an income year, invested in a rainwater harvesting system, he may deduct from his net income, the amount spent in that income year;
  • ALL employers are required to submit an ROE (full form?) electronically, on or before 16 August 2018, and include in the ROE the details of all of their employees;Employers are no more compulsorily required to insert the Tax Account Number (TAN) of their employees in the ROE. They should instead insert the National ID number of the employee or in case of a non-Mauritian citizen, the non-Citizen ID number (NCID) issued by the Passport and Immigration Office;
  • Employers submitting their monthly PAYE (full form?) return through the Mauritius Network Services (MNS) system should submit their ROE (full form?) through that system. Other employers should submit their ROE through the system made available by MRA on its website www.mra.mu;
  • Household employers are not required to submit an ROE in respect of the employees in their domestic service;
  • Employee Declaration form (EDF) for the income year 2018-19 is available on MRA website for download;
  • An exempt person means an employee whose emoluments in a month do not exceed MUR 23,461. An exempt person is not subject to PAYE tax deductions. However, it is to be noted that any fee paid by a company to its directors or by a statutory body to any member of its Board, Council, Commission or Committee, is subject to PAYE deduction at the rate of 15%;
  • An employee deriving emoluments less than MUR 23,461 or a person deriving any annuity or pension may, in a form approved by the Director-General, request the employer/payer to deduct income tax under PAYE from his emoluments, annuity or pension. The employer/payer must on receipt of the application deduct PAYE at the rate of 15% from the payments and remit same to MRA.

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