Overview of Income Tax
Taxation of income in Sierra Leone has come a long way since the enactment of the first Income Tax Act in 1943. Several reviews and amendments have been made to this legislation as the economy evolved and the needs and priorities of the government changed in ensuing years. The 2000 Income Tax Act which was enacted in April 2000 and amended in 2009 as the Consolidated Income Tax Act governs the payment of income taxes.
Scope of Income Taxes
Income Tax is a direct tax imposed on:
- Business income
- Employment income including benefits
- Property (Rental) income
- Investment income
- Any other income or gain (Capital Gains Tax)
- Pay-Roll tax which is governed by the Pay-Roll Tax Act of 1972 and its subsequent amendments &
- Income also administer as Indirect Tax – Foreign Travel Ticket Tax which was imposed by the Foreign Travel Ticket Tax Act of 1975 and was amended by Act No. 4 of 2004.
Methods of Collecting Income and Other Taxes
- Pay-as-you-earn (PAYE)
- Withholding Tax
- Fifth Instalment
- Corporation/Trade Tax
- Advance Tax
- Accounting for Pay-Roll Tax, Foreign Travel Ticket Tax and Standard Assessment
Income Tax Returns
Income Tax Returns Form are issued by the Commissioner General at the start of a tax year in which one declares his income and all taxes paid and withheld. Income Tax Returns must be filed not later than 120 days after the end of the accounting period; when this coincides with the tax year it must be filed on or before the 30 April and for substituted year not later than 120 days after the end of the accounting period.