The fourth and final quarter’s provisional income tax (QPD) for the year is due for payment on or before 20 December 2022. This instalment (payable in the currency of trade) is calculated at thirty five percent of the projected annual income tax on income from trade and investments.
While taxpayers can calculate the taxable income for each quarter and project the annual income tax, it is advisable to compute the tax using the year to date taxable profit rather than results for the respective quarter. This ensures that revenue and expenses fluctuations are factored into the annual projection.
Under this recommended method, the quarterly provisional income tax is calculated by applying the respective cumulative percentage (as shown below) and deducting the provisional income tax already paid.
Income tax for the year is expected to be fully paid by December. If not, interest is charged on underpaid QPDs. The returns (ITF12Bs) for provisional tax payments for the quarter must be submitted to the taxation authority on the said date.