What is provisional TAX?
The aim of provisional TAX is to help taxpayers (companies and individuals) meet their liabilities in the form of two payments, instead of a single large sum on assessment.
Who must register for provisional TAX?
All trading businesses must register for provisional TAX. Because businesses don't make provision for TAX by means of monthly PAYE (Pay As You Earn), the TAX amount upon assessment are usually large.
Individuals that earn income other than a salary or an allowance must register as a provisional taxpayer. This is because a salary makes provision for TAX by means of PAYE (Pay As You Earn) ONLY for your salary. This means that upon assessment, any additional income would not have been taken into account, and the TAX payer will have a TAX liability.
How does provisional TAX work?
Provisional TAX payers must pay TAX in advance in at least two amounts during the year of assessment, based on estimated taxable income. They will then also have to do a final payment after being assessed.
Due: The second payment must be made no later than the last working day of the year of assessment ending 28 February.