CHAPTER 123

Subsidiary Legislation

INCOME TAX

THE INCOME TAX (EXEMPTION) ORDER
(Section 16(2))
LN 128/1967

[11th September 1967]

1. This Order may be cited as the Income Tax (Exemption) Order.

2. - (1) Inducement allowance paid to a designated officer in respect of any period commencing on or after the 1st day of April, 1967 and that part of any gratuity which accrues to any such officer by virtue of the addition to his emoluments of such allowances as aforesaid, shall be wholly exempt from tax.

(2) In this paragraph "designated officer" shall have the meaning ascribed to that expression in clause 1 of the Overseas Service (British Solomon Islands Protectorate) Agreement, 1961, set out in the Schedule to the Overseas Service Agreements (Ratification) Ordinance, and "inducement allowance" means the inducement allowance referred to in paragraph (a) of clause 3 of the said Overseas Service (British Solomon Islands Protectorate) Agreement, 1961.
Cap. 112 1969 Revised Edition

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THE INCOME TAX (SOLOMON ISLANDS TOURIST AUTHORITY) (EXEMPTION) ORDER
(Section 16(2))
LN 23/1976

[1st January 1976]

1. This Order may be cited as the Income Tax (Solomon Islands Tourist Authority) (Exemption) Order.

2. The income of the Solomon Islands Tourist Authority derived from the discharge of its functions and the exercise of its powers under the Solomon Islands Tourist Authority Act shall be wholly exempt from tax.

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THE INCOME TAX (CENTRAL BANK OF SOLOMON ISLANDS) (EXEMPTION) ORDER
(Section 16 (2))
LN 46/1976

[21st June 1976]

1. This order may be cited as the Income Tax (Central Bank of Solomon Islands) (Exemption) Order.

2. Any income or class of income of the Central Bank of Solomon Islands which accrues in or is derived from Solomon Islands shall be wholly exempt from tax.

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THE INCOME TAX (REDUNDANCY PAYMENTS AND LONG SERVICE BENEFITS) (EXEMPTION) ORDER
(Section 16(2))
LN 51/1981

[24th July 1981]

1. This Order may be cited as the Income Tax (Redundancy Payments and Long Service Benefits) (Exemption) Order.

2. - (1) Any sum or (if there is more than one) the aggregate of the sums paid to a person in any year under section 2(1) (redundancy payments) or 15(1) (long service benefit) of the Employment Act is exempt from tax except to the extent (if any) that the sum or, as the case may be, the aggregate of the sums exceeds $500.
Cap.72

(2) In the case of an aggregate of more than $500 consisting of sums paid under sections 2(1) and 15(1) of the Employment Act, sub-paragraph (1) above shall have effect first in respect of the sum paid under section 15(1).

3. This Order has effect for the year 1981 and subsequent years.

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THE INCOME TAX (INTEREST PAID TO CERTAIN NON-RESIDENT PERSONS) (EXEMPTION) ORDER
(Section 16(2))
LN 3/1984

[6th January 1984]

1. This Order may be cited as the Income Tax (Interest Paid to Non-resident Persons) (Exemption) Order.

2. The following income which accrues in or is derived from Solomon Islands shall be exempt from tax: - 

Interest paid to a non-resident person in respect of any loan which the Government has agreed to exempt from income tax.

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THE INCOME TAX (NEW ZEALAND) (AIRCRAFT OPERATORS) (EXEMPTION) ORDER
(Section 16(2))
LN 138/1990

[12th October 1990]

1. This Order may be cited as the Income Tax (New Zealand) (Aircraft Operators) (Exemption) Order.

2. The gains or profits derived from the business of air transport operation from Solomon Islands by any New Zealand aircraft operator, who is a non-resident person in Solomon Islands, shall in whole, be exempt from income tax.

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THE INCOME TAX (DIRECTOR OF FORUM FISHERIES AGENCY) (EXEMPTION) ORDER
(Section 16(2))
LN 136/1991

[6th December 1991]

1. This Order may be cited as the Income Tax (Director of Forum Fisheries Agency) (Exemption) Order.

2. The income received in Solomon Islands by the Director of the Forum Fisheries Agency in that capacity as Director shall be exempt from tax.

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THE INCOME TAX (AIR NIUGINI) (AIRCRAFT OPERATORS) (EXEMPTION) ORDER
(Section 16(2))
LN 78/1993

[13th April 1993]

1. This Order may be cited as the Income Tax (Air Niugini) (Aircraft Operators) (Exemption) Order.

2. The gains and profits derived from the business of air transport operation from Solomon Islands by any Air Niugini Aircraft, shall in whole, be exempt from income tax.

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THE INCOME TAX (DEDUCTION OF CAPITAL EXPENDITURE) (MINING OF BAUXITE) ORDER
(Section 18(6))
LN 125/1970

[11th December 1970]

1. This Order may be cited as the Income Tax (Deduction of Capital Expenditure) (Mining of Bauxite) Order.

2. Capital expenditure incurred in Solomon Islands by a person carrying on the business of mining bauxite shall be subject to relief under Part III of the Fourth Schedule to the Act to the extent that such expenditure would have qualified for relief if the definition of "mineral" in that Part included bauxite howsoever obtained.

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THE INCOME TAX (DEDUCTION OF CAPITAL EXPENDITURE ON RE-AFFORESTATION) ORDER
(Section 18(6))
LN 39/1982

[13th August 1982]

1. This Order may be cited as the Income Tax (Deduction of Capital Expenditure on Re-afforestation) Order.

2. In this Order "capital expenditure on re-afforestation" means expenditure incurred on clearing and preparing land, purchasing, planting and maintaining trees and on rents, rates, insurance and interest in respect of a re-afforestation project.

3. Capital expenditure on re-afforestation shall be allowed as a deduction in respect of improvements as though in the Fourth Schedule to the Income Tax Act - 

(a) there were added to paragraph 7 thereof the following additional sub-paragraph - 

"(d) capital expenditure on re-afforestation;" and

(b) there were added to sub-paragraph (ii) of paragraph 7, the following additional clause:- 

"(e) that in the case of re-afforestation expenditure one-fifteenth of such expenditure shall be deducted in computing gains or profits for such year and each of the following 14 years."

4. This Order shall have effect for the year 1982 and subsequent years.

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THE INCOME TAX (DEDUCTION OF CAPITAL EXPENDITURE ON SPECIAL DEVELOPMENT ASSETS) ORDER
(Section 18(6))
LN 40/1982

[13th August 1982]

1. This Order may be cited as the Income Tax (Deduction of Capital Expenditure on Special Development Assets) Order.

2. In this Order - 

"special development activity" means an activity declared to be a special development activity by the Minister under paragraph 3 of this Order;

"special development asset" means any asset described in sub-paragraphs 1(2)(i), 1(2)(ii) or 1(2)(iii) of the Fourth Schedule to the Income Tax Act acquired by and used for the purposes of a special development activity and declared to be special development assets under paragraph 5 of this Order.

3. Where, having regard to the economic and other benefits likely to accrue to Solomon Islands, it is in the opinion of the Minister in the national interest so to do, he may by notice in the Gazette declare an activity of any person to be a special development activity for such period not exceeding 5 years as shall be specified in the notice.

4. Capital expenditure on special development assets may, subject to paragraph 5 of this Order, be allowed as a deduction as though sub-paragraph (2) of paragraph 1 of the Fourth Schedule to the Income Tax Act contained an additional sub-paragraph as follows: - 

"(iv) special development assets ... 100%"

5. A person engaged in a special development activity may, in writing to the Commissioner elect to declare which assets of the business shall be special development assets provided that such election, which shall be irrevocable, shall be made within 3 months of the end of the year in which the expenditure was incurred or within such extended period as the Commissioner may allow.

6. This Order shall have effect for the year 1981 and subsequent years.

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THE INCOME TAX (DEDUCTION OF CAPITAL EXPENDITURE ON SPECIAL DEVELOPMENT ASSETS) ORDER

DECLARATIONS OF SPECIAL DEVELOPMENT ACTIVITIES UNDER 
PARAGRAPHS 2 & 3

The forest and processing activity of the Kolombangara Forest Product Limited to be a special development activity for a period of five years from 20th June 1990.
LN 84/1990

The Honiara Factory Development of the Solomon Islands Tobacco Company Limited to be a special development activity, for a period of five years from 4th January 1994.
LN 1/1994

The upgrading of the Tetere Palm Oil Mill to be a special development activity for a period of three years from 31st May 1994.
LN 79/1994

The Diploma in Banking course at the Solomon Islands College of Higher Education to be a special development activity for a period of three years from 17th July 1995.
LN 77/1995

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THE INCOME TAX (ANNUAL VALUE OF PREMISES) ORDER
(Section 24)
LN 105/1985

[31st December 1995]

1. This Order may be cited as the Income Tax (Annual Value of Premises) Order and shall have effect for the year 1986 and subsequent years.

2. For the purpose of section 24 of the Income Tax Act the annual value of premises provided by an employer shall not exceed eleven thousand dollars.

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APPROVED FUNDS
(Section 27)	Order dated	
Union Overseas Provident Fund.	24-11-1949
(141/133/49)	
Commonwealth Bank of Australia Officers' Superannuation	16-11-1951	
Fund.	(144/142/51)	
Shell Australian Contributory Pension Fund.	11-9-1952
(124/243/52)	
Federated Superannuation Scheme for Universities.	30-6-1956 (109/101/56)	
Supernumerary Fund of the Methodist Church of New	15-12-1956	
Zealand.	(212/225/56)	
Deaconess Retiring Fund of the Methodist Church of New Zealand.	15-12-1956
(212/225/56)	
British Broadcasting Corporation Staff Pension Scheme.	4-2-1960
(5/5/60)	
Uniac Pension Fund. (With effect from 1st January 1963.)	18/6/1963
LN 58/1963	
Employees Provident Fund (Bank of New South Wales).
(With effect from 1st January 1964.)	24/2/1964
LN 41/1964	
The fund established under the Commonwealth Development Corporation Pensions Scheme.	24-5-1980
LN 28/1980	
Cable and Wireless Supplementary Superannuation Fund.	24-5-1980
LN 28/1980	
Cable and Wireless Pension Fund.	24-5-1980
LN 28/1980	
Cable and Wireless Staff Dependants Fund.	24-5-1980
L.N. 28/1980	
Professionals Superannuation and Benefits, Group.	3-8-1986
LN 101/1986	
A.M.P. Personal Superannuation (N.Z) Fund.	10-8-1988
LN 82/1988	
Westpac Banking Corporation's Superannuation Scheme Fund.	20-3-1989
LN 35/1989	
Burns Philip (Hong Kong) Retirement Fund.	19-12-1989
LN 6/1990	
Galley Reach Holdings Pty Ltd Superannuation Fund (PNG).	12-2-1991
LN 24/1991	
Asian Paints Factory Employee's Provident Fund.	12-3-1991
LN 34/1991	
NSW Superannuation Fund.	23-8-1991
LN 11/1991	
Solbrew Superannuation Fund.	25-2-1993
LN 36/1993	
Australasian Conference Association Superannuation Trust.	1-7-1993
LN 150/1993	
Hogg Robinson Australia Group Staff Superannuation Fund.	31-5-1994
LN 77/1994	
QBE Group Staff Superannuation Plan.	31-5-1994
LN 78/1994	

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THE INCOME TAX (PERSONAL EXEMPTION) ORDER
(Section 31)
LN 3/1980

[1st January, 1980]

1. This Order may be cited as the Income Tax Act (Personal Exemption) Order.

2. For the purpose of Section 31(3) (c) of the Income Tax Act the maximum fees which may be claimed in respect of any child shall be two thousand dollars.

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THE INCOME TAX (INSTALMENT INTEREST RATES) ORDER
(Section 83)
LN 4/1984

[1st January 1984]

1. This Order may be cited as the Income Tax (Instalment Interest Rates) Order.

2. This Order shall apply to:

(i) all instalment arrangements agreed upon by the Commissioner after 1st January 1984; and

(ii) all previous instalment arrangements agreed upon by the Commissioner to the extent that tax, interest and penalties in relation to such previous arrangements remain unpaid on such date.

3. The rate of interest on any amount owing in respect of tax, interest and penalties payable by instalments under Section 83(4) of the Income Tax Act shall be 1.25% per calendar month or part of a calendar month and such interest shall be compounded each calendar month.

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APPOINTMENT OF UNITED KINGDOM AGENT
(Section 105(2))
LN 33/1972

[30th June, 1972]

The Official Representative, Overseas Territories Income Tax Office, has been appointed as agent in the United Kingdom for the purposes of the Act.

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THE TAX DEDUCTION RULES
(Section 114)
LN 1/1982

[1st January 1982]

PRELIMINARY

Short title

1. These Rules may be cited as The Tax Deduction Rules

Definitions

2. In these Rules unless the context otherwise requires - 

"annual summary" means an annual summary under rule 29;

"appropriate form" means a form approved by the Commissioner for use in any particular case;

"emoluments" includes - 

(i) income from any source specified under section 3(a)(ii) of the Act;

(ii) director's fees or salary;

(iii) extra emoluments being any payment made to any person in respect of or in relation to employment of that person (whether for a period of time or not), being a payment which is not regularly included in salary or wages payable to that person for a pay period, but not being over-time pay; and includes any such payment made by way of bonus, gratuity, retiring allowance, or share of profits;

(iv) the value of any benefit, advantage, or facility of whatsoever nature, granted in respect of employment or services rendered;

(v) the grossed-up value of any tax paid by an employer which is not deducted from emoluments paid to an employee;

"employee" means any person to whom emoluments are paid or payable;

"employer" means any person paying emoluments whether on his own account or on behalf of any other person to an employee and includes - 

(i) the manager or other principal officer in the case of a body of persons;

(ii) each partner in the case of a partnership;

(iii) each person in whom the property has become vested or to whom the control of the property has passed in the case of the estate of a deceased person, a trust, a company in liquidation, or an assigned estate, or in any other case where property is vested or controlled in a fiduciary capacity;

(iv) an accounting officer being a public officer designated or appointed under section 17 of the Public Finance and Audit Act charged with the duty of accounting for any service for which moneys are appropriated under that Act;
Cap. 120

(v) any officer designated or appointed as Clerk to, or Treasurer of, any Provincial Assembly or other local government body;

"monthly remittance certificate" means a monthly remittance certificate under rule 18;

"paid" in relation to emoluments includes distributed, credited or dealt with in the interest of or on behalf of an employee and "pay" and "payment" shall have corresponding meanings;

"pay and tax record card" means a card required to be maintained by an employer under rule 34 or as an alternative to such card, any record approved by the Commissioner under that rule;

"pay period" in relation to an employee receiving regular payments of emoluments means the period for which any such payment is made or payable;

"primary employer" shall have the meaning ascribed to that term in rule 22;

"secondary employer" shall have the meaning ascribed to that term in rule 22;

"secondary employment" means employment by a secondary employer;

"special tax certificate" means a special tax certificate under rule 23;

"tax code", in relation to an employee, means his tax code under rule 21;

"tax code declaration" means a tax code declaration under rule 21;

"tax deduction" means any tax deduction made or required to be made under these Rules;

"tax deduction certificate" means a certificate under rules 25, 26, 27 or 28;

"tax tables" means the tables prepared by the Commissioner under rule 8.

Registration of employers

3. Every person who is an employer or carries on or is about to carry on any activity in respect of which he is or will be an employer, shall, if he has not already done so, within one month of the commencement of such activity, register with the Commissioner in the appropriate form.

Personal liability in cases of partnership, company etc.

4. Where a trade, business, profession or vocation is carried on by two or more persons jointly, each person shall be jointly and severally liable for the performance of the duties required by the provisions of these Rules to be performed by an employer; and where a trade, business or profession is carried on by a body of persons the directors, general manager, accountant, secretary, or other principal officers of such body shall each jointly and severally, in addition to the body itself, be personally liable for the performance of the said duties:

Provided that where any person liable as aforesaid is not resident in Solomon Islands the attorney, agent, manager or factor of such person resident in Solomon Islands shall be personally liable for the performance of the duties.

Passing of employer's liability on death

5. If an employer dies, anything which he would have been liable to do under these Rules shall be done by his personal representative, or, in the case of an employer who paid emoluments on behalf of another person, by the person succeeding him, or, if no person succeeds him, by the person on whose behalf the emoluments were paid.

Employee to be treated as employer

6. Where for any reason an employer is exempt from complying with these Rules, or, in such other circumstances as the Commissioner shall from time to time direct, each employee of that employer shall for the purposes of these Rules be deemed to be an employer.

DEDUCTION AND ACCOUNTING FOR TAX

Tax deductions to be made by employers

7. - (1) Where any employer pays emoluments to any employee for any pay period, the employer shall, at the time of making the payment, subject to these Rules, deduct therefrom -

(a) in the case of an employee who has furnished his employer with a tax code declaration under rule 21, tax as prescribed in the tax tables for that pay period of such amount as is applicable to his emoluments and his tax code; or

(b) in the case of an employee in respect of whom there has been issued a special tax certificate, tax of such amount or at such rate as may be prescribed by the Commissioner; or

(c) in the case of a non-resident employee and any other employee in respect of whom tax is not deductible in accordance with sub-paragraphs (a) or (b), tax as prescribed in the tax tables for that pay period as applicable to his emoluments.

(2) Notwithstanding the provisions of paragraph (1), when an employer makes a payment of an extra emolument to an employee, tax shall be deducted at the rate of thirty cents in the dollar from the amount of such extra emolument or such other rate as the Commissioner shall prescribe:

Provided that where any extra emolument is paid together with the emoluments for any pay period such extra emolument and the emoluments shall be aggregated and a tax deduction made as if the aggregated amounts were the emoluments for that pay period.

Commissioner to prepare tax tables

8. - (1) The Commissioner shall prepare tables for the purpose of ensuring that the total tax payable in respect of any emoluments for any pay period can, so far as is practicable, be readily ascertained.

(2) Such tables shall make provision for such rates of emoluments and pay periods as the Commissioner shall think fit.

(3) For the purposes of this rule, reference to the total tax payable shall, in relation to the tables referred to in paragraph (1), be construed as a reference to the total tax estimated to be payable having regard only to the information declared by an employee under rule 21.

Determination of pay periods

9. - (1) Where in the case of a regular full-time employment an employee receives emoluments from any one employer for part only of a pay period, those emoluments shall be deemed to be for the whole of the pay period.

(2) Where an employee's emoluments for any pay period are paid in two or more separate sums, all sums so paid shall, for the purpose of calculating the amount of the tax deduction, be aggregated, and the employer may, at his option, make the tax deduction wholly from one sum or in part from each of any two or more sums:

Provided that where, by reason of the size or nature of the employer's business or organisation, the dispersal of employees, or difficulty in assembling particulars, or for any other reason approved by the Commissioner, it is impracticable for an employer to pay overtime pay for a pay period at the same time as the other emoluments for the pay period, the overtime pay of any employee for the pay period may, for the purpose of calculating the amount of the tax deduction, be aggregated with the employee's emoluments (other than overtime pay) for a subsequent pay period.

Commissioner may determine questions on emoluments

10. For the purposes of these Rules, if any question shall arise as to - 

(a) the amount of tax to be deducted on payment of any emoluments; or

(b) whether or not any payment of emoluments is as to the whole or any part thereof subject to these Rules,

such question shall be determined by the Commissioner.

Employee may complain to Commissioner in respect of deductions made by employer

11. - (1) If any employee considers that any tax deducted by his employer is less than or in excess of the amount of tax which ought properly to be deducted from his emoluments in accordance with these Rules, he may, in writing, give notice of complaint, stating the grounds of his complaint, to the Commissioner.

(2) In the event of the Commissioner being satisfied on the complaint of any employee made under this rule-

(a) that any tax in excess of the amount which ought properly to have been deducted in accordance with these Rules from the emoluments of the employee was deducted by the employer, he may cause the excess to be refunded to the employee;

(b) that less tax than the amount which ought properly to have been deducted in accordance with these Rules from the emoluments of the employee was deducted by the employer, he may cause the amount of the deficiency to be collected from the employee.

Emoluments deemed to be paid

12. - (1) For the purposes of these Rules every employer shall be deemed to make a payment of emoluments to an employee not only when an amount of emoluments is actually paid but also when emoluments are credited for the benefit of an employee to an account on which the employee can draw or over which he has control or are otherwise applied for his benefit or at his direction or are applied in reduction of a debt due by him to the employer unless such indebtedness arose from a payment in advance of or on account of remuneration from which tax was deducted at the time of payment.

(2) Where any emoluments though not actually paid, are credited to or applied on account of any employee as aforesaid a tax deduction in respect thereof shall be made accordingly.

Benefits and other payments deemed to be emoluments

13. - (1) Where an employee receives or enjoys a benefit, advantage or facility (hereinafter called a benefit) referred to in section 5(b) of the Act, the value of the benefit (whether in money or otherwise) or, as the case may be, the amount of the payment, shall be deemed to accrue from day to day, and accordingly in each case the amount so accrued for any days in a pay period of the employee shall be deemed to be his emoluments for the pay period, or, as the case may be, part of his emoluments for the pay period.

(2) Where a benefit to which paragraph (1) applies is received or enjoyed by an employee otherwise than in money, the value of the benefit for a pay period shall be deemed to be paid to the employee at the time when his emoluments for the pay period are paid or deemed to be paid to him and shall be aggregated with his emoluments for the purpose of calculating the amount of the tax deduction:

Provided that, where the value of the benefit constitutes the only emoluments of the employee for the pay period, the value of the benefit shall be deemed to be paid to the employee on the last day of the pay period.

(3) When, at the time when a payment of emoluments is made or deemed to be made, the amount of the emoluments available in money is less than the amount of the tax deduction, or there is no amount available in money, the employee shall forthwith pay to the employer the amount of the deficiency in the tax deduction or, as the case may be, the amount of the tax deduction, and every amount so paid on any date shall be deemed to be a tax deduction made by the employer on that date from his employee's emoluments.

Company directors deemed to be employees

14. - (1) For the purposes of these Rules a director of any company - 

(a) shall be deemed to be an employee of that company and that company his employer; and

(b) any remuneration paid or credited to him by that company shall be deemed to be emoluments.

(2) Where any company makes any payment of emoluments to a director, not being of a regular amount for regular pay periods of one month or less, a tax deduction at the rate of twenty-five cents in the dollar, or at such other rate as the Commissioner may from time to time prescribe, shall be made from the amount of such payment to him.

(3) The tax required to be deducted under paragraph (2) shall be paid to the Commissioner on or before the fifteenth day of the month next following the month in which the emoluments were paid or credited.

(4) For the purposes of this rule a director's emoluments shall be deemed to have been paid or credited when he becomes entitled to receive such emoluments.

Amount of tax deductions deemed to be received by employee

15. Where any amount has been deducted from a payment of emoluments by way of tax deduction under these Rules the amount so deducted -

(a) as between the employer and the employee, shall be deemed to have been received by the employee at the time of the payment of emoluments;

(b) for the purposes of the Act, shall be deemed to have been derived by the employee at the same time and in the same way as the residue of the payment of emoluments;

(c) shall upon the amount being so deducted be deemed to have been paid by the employee who shall thereupon cease to be liable for payment of tax to the extent of the amount so deducted.

Notification to employee of total emoluments and tax deducted

16. When an employer makes any payment of emoluments to an employee from whom tax is deducted, he shall notify the employee in writing at the time the emoluments are paid of the total emoluments for the pay period and of the tax deducted from such emoluments.

Deductions in case of death of employee

17. If emoluments are paid by an employer in respect of an employee after the death of that employee, the employer shall on making such payment deduct the tax from such emoluments as if the deceased employee were still alive at the date of payment.

Payment of tax deductions to Commissioner

18. - (1) Every employer shall, on or before the fifteenth day of the month next succeeding the month in which the employer paid emoluments to his employees, pay to the Commissioner, or as the Commissioner may direct, the total amount of tax deducted or required to be deducted by him in compliance with the provisions of these Rules:

Provided that where such employer ceases to be an employer all amounts of tax deducted by him as required by these Rules shall be paid by him to the Commissioner within seven days of the day on which such employer ceases to be an employer.

(2) Every payment made as required by this rule shall be accompanied by a monthly remittance certificate made out in the appropriate form by or on behalf of the employer.

No action by employee against employer

19. No action shall lie by an employee against his employer for deducting any sum of money in compliance with the provisions of these Rules.

Agreements not to make tax deductions to be void

20. Where a tax deduction is required to be made under the provisions of these Rules any provision in an agreement not to make the tax deduction in accordance with those provisions shall be void.

TAX CODE DECLARATIONS AND TAX DEDUCTION CERTIFICATES

Employee’s tax code declaration

21. - (1) Subject to these Rules every employee, other than an employee whose emoluments are exempt from tax under section 16 of the Act shall, for the purpose of enabling tax deductions to be made from his emoluments, furnish his employer not later than the seventh January in each year or seven days after the commencement of employment, a tax code declaration in the appropriate form, signed by him, specifying one of the following codes: -

"S" signifying a person entitled to a basic personal exemption under section 29(1)* of the Act;

"M" signifying a person entitled to an increased basic personal exemption under section 29(3)* of the Act:

*Section 29 has since been replaced by a new section -Vide Section 2 of Act No. 12 of 1992.

Provided that this paragraph shall not apply - 

(a) to any employee, other than a married woman or a person in secondary employment, who does not or will not receive emoluments in excess of one thousand three hundred dollars in any year and a person, other than a married woman or a person in secondary employment, shall be deemed to be a person who will receive emoluments in excess of one thousand three hundred dollars in any year when the emoluments paid for any pay period multiplied by the number of pay periods in a year provides a sum in excess of one thousand three hundred dollars;

(b) to any employee in respect of whose emoluments the Commissioner has issued a special tax certificate;

(c) to any employee in respect of whose emoluments the Commissioner has approved some alternative means of payment of the tax payable thereon.

(2) An employee may furnish his employer with an amending tax code declaration if his entitlement to personal exemptions increases during any year.

(3) An employee shall furnish his employer with an amending tax code declaration if his entitlement to personal exemptions decreases during any year.

(4) No employee who engages in more than one employment at any time shall contemporaneously deliver or maintain a tax code declaration in respect of more than one employment:

Provided that, where in any pay period the employee has left one regular full-time employment, the employee may in the same pay period, after leaving that employment, deliver a tax code declaration in respect of any other regular full-time employment.

(5) Where an employee has delivered a tax code declaration or a special tax certificate to his employer, the tax code shall subject to the provisions of these Rules, apply to the employee in respect of all payments of emoluments made by the employer to the employee after the delivery of the declaration or certificate and before the tax code ceases in accordance with paragraph (6) to apply to the employee:

Provided that, except in the case of emoluments for the first pay period of a new employment of the employee, the tax code shall not apply in respect of the emoluments for any pay period commencing before the date of the delivery of the declaration or certificate to the employer.

(6) Where a tax code or special tax certificate applies to an employee on the last day of a year, the tax code or special tax certificate shall not apply to the employee in respect of any payment of emoluments made by the employer to the employee after that day, not being a payment of emoluments for a pay period current on that day:

Provided that where there is no change in the tax code of the employee and the employee delivers a further tax code declaration or special tax certificate to the employer not later than the seventh day of January in the next succeeding year, the tax code specified in that declaration or certificate shall be deemed to have commenced to apply to the employee immediately after the former tax code ceased to apply to him.

(7) A tax code declaration or a special tax certificate applying to an employee in respect of his employment by any employer shall not apply to the employee in respect of his employment by any other employer, not being a successor of the first-mentioned employer in the same employment.

(8) For the purposes of this rule a tax code declaration or special tax certificate which is delivered to an employer before the beginning of any year but is expressed to relate to that year shall be deemed to be delivered on the seventh day of January in that year.

Employee with more than one employer

22. - (1) If an employee has more than one employer he may submit a tax code declaration under rule 21 to one employer only, who shall be known as the primary employer. His other employers shall be known as secondary employers.

(2) Where any employee has a secondary employer he shall notify the Commissioner in the appropriate form giving the names of his primary employer, his secondary employers and his estimated annual emoluments from each whereupon the Commissioner shall cause to be issued to his secondary employers a special tax certificate specifying the rate of tax to be deducted from his emoluments.

Special tax certificates

23. - (1) Where the Commissioner in any case thinks fit he may issue to an employee or his employer a special tax certificate under this rule.

(2) Where an employer makes a payment of emoluments in respect of which a tax deduction is required to be made in accordance with a special tax certificate, the provisions of the certificate in respect of the payment shall apply notwithstanding anything to the contrary in these Rules.

(3) The Commissioner may at any time cancel any special tax certificate and shall give notice thereof to the employee and his employer.

Recording of tax codes by employer

24. - (1) On receipt of an employee's declaration an employer shall record on the pay and tax record card of that employee - 

(a) in the case of a non-resident employee, that the employee is a non-resident;

(b) in the case of a resident employee who is in secondary employment, the rate of tax to be deducted from the employee's emoluments;

(c) in the case of all other resident employees, the tax code declared by that employee on his tax code declaration and the frequency of his pay periods:

Provided that where no tax code declaration has been received from that employee the employer shall record on that employee's pay and tax record card that tax is required to be deducted at the rate of tax applicable to non-resident employees.

(2) An employer shall retain each employee's declaration until the end of the year or until such employee earlier leaves the employment of that employer.

(3) For the purposes of this rule the expression "tax code declaration" shall include a special tax certificate issued by the Commissioner.

Employer to furnish tax deduction certificates

25. - (1) On or before the thirty-first of January each year every employer shall, unless he has previously delivered or sent to his employees a tax deduction certificate under rules 26, 27 or 28, deliver or send by post to each of his employees from whom he has or ought to have deducted tax, a tax deduction certificate in the appropriate form.

(2) Every tax deduction certificate required to be made out by any employer under these Rules shall be made out in triplicate - 

(a) the original and duplicate of which shall be delivered or sent by post to the Commissioner as required by rule 29;

(b) the triplicate of which shall be delivered or sent by post to the employee as required by these Rules.

(3) The Commissioner may approve alternative forms of certificates under this rule provided he is satisfied that it would be reasonable and not inconsistent with these Rules so to do.

Employer to furnish tax deduction certificates when ceasing to be an employer

26. - (1) If an employer ceases to be an employer he shall, at the time of making the final payments of emoluments to his employees, deliver to each employee from whom he has or ought to have deducted tax during the year in which he so ceases, a tax deduction certificate made out in the appropriate form in respect of the period beginning with the first day of the year in which he ceases and ending on the day on which he ceases:

Provided that, where an employer ceases to be an employer in the year in which he started to be an employer the date of commencement of the period for or in respect of which the particulars of the certificate shall relate shall be the date on which he commenced to be an employer.

(2) A certificate made out under paragraph (1) shall be made out in triplicate by an employer-

(a) the original and duplicate of which shall be delivered or sent by post to the Commissioner as required by rule 29;

(b) the triplicate of which shall be given to his employee as required by paragraph (1).

Employer to furnish tax deduction certificate on death of employee

27. - (1) Where an employee dies his employer shall, not later than one month after the death occurred, deliver or send to the personal representative or to the next of kin of the deceased employee if known to him, a tax deduction certificate made out in the appropriate form.

(2) A certificate made out under paragraph (1) shall be made out in triplicate by the employer-

(a) the original and duplicate of which shall be retained by the employer for submission to the Commissioner under rule 29;

(b) the triplicate of which shall be given to the personal representative or next of kin of the deceased employee as required by paragraph (1).

Employer to furnish tax deduction certificate on cessation of employment

28. - (1) Where during any year any employee ceases his employment his employer shall, at the time of making the final payment of emoluments in respect of that employment to the employee, deliver to the employee a tax deduction certificate made out in the appropriate form:

Provided that this rule shall not require an employer to deliver a tax deduction certificate to any resident male employee to whom he has not paid emoluments, including any benefit, facility or advantage, in excess of $100 in any month at any time during the year unless such male employee is an employee in secondary employment.

(2) A certificate made out under paragraph (1) shall be made out in triplicate by the employer-

(a) the original and duplicate of which shall be retained by the employer for submission to the Commissioner under rule 29;

(b) the triplicate of which shall be given to the employee as required by paragraph (1).

(3) If an employee retires from the service of an employer and is granted a pension, annuity or allowance in respect of past services, such retirement shall not be treated as cessation of employment for the purposes of this rule if the emoluments are paid by or on behalf of the same person both before and after the retirement.

Employer to furnish annual summary

29. - (1) By thirty-first January of each year following a year in which emoluments were paid by him, each employer shall furnish to the Commissioner an annual summary in the appropriate form, signed by the employer, showing the total of all tax deductions paid to the Commissioner under these Rules in respect of the preceding year and the total amount of all tax deductions shown in any tax deduction certificate given to his employees under these Rules together with an explanation if the two totals do not agree.

(2) Each employer shall furnish together with his annual summary two copies of all tax deduction certificates issued under these Rules in respect of the preceding year.

(3) If an employer ceases to be an employer he shall, not later than one month after he ceases comply with the provisions of paragraphs (1) and (2) as if the period from the first of January to the date on which he ceased was the preceding year in respect of which he is required to furnish an annual summary and tax deduction certificates.

CREDITING TAX DEDUCTIONS

Tax deductions to be credited against tax charged

30. - (1) Every employee who furnishes to the Commissioner a return of income for any year shall forward with the return all tax deduction certificates delivered to him in respect of tax deductions made during the year from his emoluments.

(2) Where for any year the Commissioner received from or on account of an employee any tax deduction certificate or the amount of any tax deduction made and not included in a tax deduction certificate, and the Commissioner has made an assessment of income tax in respect of that year, the Commissioner shall credit the total of such tax deductions in payment of the income tax payable by the employee on such assessment.

(3) If the Commissioner has reason to believe that any tax deduction certificate received by him for the purposes of this rule is incorrect in any particular, he shall not deal with the certificate as required by the foregoing provisions of this rule until he is satisfied that the certificate is correct.

(4) Where the Commissioner has credited in payment of income tax, or made a refund in respect of, an amount shown in a tax deduction certificate which is in excess of the amount that the employer has deducted from a payment of emoluments to which the certificate relates, the employer and the employee shall be jointly and severally liable to pay to the Commissioner the amount of the excess, and that amount shall be deemed to have become due and payable on the fifteenth day of January in the year after the year to the whole or part of which the tax deduction certificate relates.

Lost tax deduction certificates

31. Where the Commissioner is satisfied that a tax deduction certificate has been lost or destroyed, and is satisfied as to the amount of the deductions shown in that certificate, the Commissioner may apply the provisions of rule 30 in the same manner as if the certificate had been received by the Commissioner.

Tax deduction for which no certificate issued

32. Where the Commissioner is satisfied that any employer has made any tax deduction from a payment of emoluments made to an employee, and has failed to deliver to the employee within the prescribed time a tax deduction certificate in respect of the deduction, the Commissioner may apply the provisions of rule 30 in the same manner as if a tax deduction certificate showing the tax deduction had been delivered to the employee and received by the Commissioner.

Employer to keep records

33. - (1) The provisions of section 61(3) of the Act (relating to the duty of a person carrying on a business to preserve certain books of account and documents relating to such business) shall apply with the necessary changes to an employer and the documents and records referred to in these Rules.

(2) Every employer shall take all reasonable precautions for the safe custody of all records that he is required to keep under these Rules and of all pay sheets and receipts for payments of emoluments, and shall retain all such records, pay sheets, and receipts for not less than seven years after the making of the payments to which they relate:

Provided that this paragraph shall not require the retention of any records, pay sheets, or receipts in respect of which the Commissioner has notified the employer that retention is not required.

Pay and tax record cards

34. - (1) Every employer shall maintain in every year in respect of each of his employees a pay and tax record card, in the appropriate form.

(2) The Commissioner may, on the application of the employer concerned, approve as an alternative to a pay and tax record card any record which, in his opinion, shows substantially the same particulars as a pay and tax record card.

Production of records by employer

35. Every employer, when called upon to do so by the Commissioner, shall produce to the Commissioner for inspection all wage sheets and other documents and records whatsoever relating to the calculation or payment of emoluments to his employees or to the deduction of tax from such emoluments or to the accounting for any tax deducted therefrom.

RECOVERY OF TAX DEDUCTIONS

Recovery of tax deductions from employers

36. - (1) The amount of every tax deduction made under these Rules shall be held in trust for the Crown; and any amount so held in trust shall not be property of the employer liable to execution, and, in the event of the bankruptcy or liquidation of the employer or of an assignment for the benefit of the employer's creditors, shall remain apart, and form no part of the estate in bankruptcy, liquidation, or assignment.

(2) The total amount of tax which an employer is liable under rules 14 or 18 to pay to the Commissioner may for the purposes of recovery thereof be treated as a single debt notwithstanding that the employer is liable to pay separate amounts in respect of more than one employee, but nothing in this rule shall prevent the bringing of separate actions for the recovery of each of the several amounts which an employer is liable to pay within such time in respect of his several employees.

(3) The right of the Commissioner to recover from the employer the amount in respect of which default has been made shall be in addition to any right of the Commissioner to recover that amount from the employee under these Rules; and nothing in these Rules shall be construed as preventing the Commissioner from taking such steps as he thinks fit to recover that amount from the employer and from the employee concurrently, or from recovering that amount wholly from the employer or from the employee or partly from the employer and partly from the employee.

Employer failing to make tax deductions

37. - (1) Where an employer fails to make any tax deduction in accordance with his obligations under these Rules the amount in respect of which default has been made shall constitute a debt payable to the Commissioner, and shall be deemed to have become due and payable to the Commissioner on the fifteenth day of the month next after the month in which payment of the emoluments was made.

(2) If any employer fails or neglects to deduct tax under the provisions of these Rules and all reasonable efforts to recover such tax from the employee have failed then such employer shall be liable for the payment of the tax.

Application of the Act to amounts payable under these Rules

38. Subject to the provisions of these Rules, the provisions of the Act shall apply with respect to every amount that any employer, employee, or other person is liable to account for or pay to the Commissioner under these Rules as if the amount were income tax.

Assessment and payment of income tax

39. Notwithstanding anything contained in these Rules, for the avoidance of doubt, the amount of income tax for which an employee is liable in respect of the income derived by him in any income year shall be determined in accordance with the provisions of the Act.

Returns of income

40. For the avoidance of doubt, it is hereby declared that, notwithstanding the provisions of these Rules, any employee shall make a return of income for any year in accordance with section 57(1) of the Act.

Extension of time by Commissioner

41. The Commissioner may at any time extend the period in which anything required to be done by these Rules has to be done.

Delegation of powers

42. The Commissioner may, subject to section 106(2) of the Act, authorise any officer to exercise any of the powers conferred by these Rules upon the Commissioner, to such extent as he thinks fit.

Exemption of non-resident employers and their employees

43. Non-resident employers and the employees of such employers shall be exempt from the provisions of these Rules upon their obtaining the agreement in writing of the Commissioner to any other arrangements for the payment of tax by such employees.

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