Corporate Income Tax

The corporate income tax rate is proposed to be revised to create a three tier structure of 14 percent, 28 percent and 40 percent. 

Income tax rate applicable on liquor, tobacco, betting and gaming, etc. will be continued at the rate of 40 percent.(it is uncertain whether the profits from lottery which was liable at the highest rate of 40% during the previous years of assessment will be continuously liable at the highest rate of income)


SMEs, Exporters of goods and services, Agricultural sector and Education sector will be subjected to the lower rate of 14 percent.

The SME category will be redefined in a rationalized manner. (The maximum turnover criteria of 750 mn which was used to determine the SMEs in the year of assessment 2015/2016 has been reduced to 500Mn.)


All others including banking, finance, manufacturing and trading will be subjected to income tax at 28 percent. (the reduced income tax rate which was applicable to various undertaking such as development of software, supply of labour, etc will be increased to 28%)


Income tax rate of 10 percent currently applicable on funds, dividends, treasury bills and bonds will be increased to 14 percent.



Remove the exemptions applicable on the income from the investment on listed securities, Dividends, Unit Trusts and other instruments.


Notional Tax Credit applicable on the secondary market transaction of securities also will be removed.


The period of depreciation of capital assets will be revised for Plant, and Machinery and buildings.

The rate of capital allowances will be revised as follows:

  • Plant, machinery or equipment – the present rates of 331/3 %, 50% and 100% will be revised as 20% (5 equal installments).
  • Buildings – the present rate of 10% will be reduced to 5% (20 equal installments).



Investment Incentives

  • 100% capital allowances will be granted on investment in fixed assets not less than USD 03 mn with not less than 250 employment.
  • 200% capital allowances will be granted if the investment with the same conditions referred to above is made in Northern Province.
  • 100% capital allowances and for the second year of commercial operation
  • 5% of the investment as a tax credit up to a maximum of tax payable , if such investment is not less than USD 05 mn with minimum 300 employment in any trade or business.

Specific concessions

Specific concessions will be announced for:

  • any investment not less than USD 100 mn with minimum employment of 500; or
  • any investment not less than USD 500mn . in any trade or business.

Concessions to exporters

  • A rebate will be given equal to 75% of the income tax attributable to
  • excess profit of 2016/17, where profits from exports in foreign currency increased over 15% or more in 2016/17 compared to 2015/16.


Incentive for Listing 

Tax incentives which are already given to encourage listings will be continued. The new firms that will list on the stock exchange in the year 2017/18 will be entitled to a grant of an amount equal to 25 percent of the total income tax paid by that firm for the last year prior to listing.


Revision of time bar provisions


The present period to issue assessments of 18 months will be reduced to 09 months.



  • The present period of 24 months to hear an appeal by the Commissioner General will be reduced to 06 months.
  • The present period of 24 months to hear an appeal at the Tax Appeal Commission will be reduced to 06 months.





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