The two categories of provisional tax payments are:

• 15% provisional tax on contractual payments.
• asssessed provisional tax for sole traders.

Who is required to deduct the 15% provisional tax?

Under the terms of Legal Notice No. 70 of 1976 (summary) where a payment arises under any contract for services, including progress payments under a contract, the payer is required to withhold 15% of the payment and remit the amount to this office by the end of the month following the month in which the deduction was made. Any such deduction will be allowed as a credit against any tax assessed on the payee.

The provisional tax will not be deducted if the total amount to be paid to any one person in aggregate in any year is less than the provisional tax threshold of $300 ( w.e.f-01 st January 2005).The provisional tax will also not be deducted by the payer if the contracted party has a valid Certificate of Exemption issued by FIRCA. Before a Certificate of Exemption will be given, the applicant must:

• have all their tax returns lodged.
• have all their taxes paid.

If the applicant does not have a TIN, they must complete the form Application for Registration (IRS001) as well as the Application Form for Certificate of Exemption from Provisional Tax (IRS603).

Assessed provisional tax for sole traders

Self employed taxpayers are covered by a provisional tax (PT) system, which requires payment of tax in advance.

The amount of provisional tax is calculated by reference to the amount of tax payable in the preceding year and is divisible by three (3).
 
The due dates for payment are:

• 30 April.
• 31 August.
• 30 November.

PT paid will be allowed as a credit against the tax due on assessment of the actual liability for the year.


Company Advance Tax

 A company is required to make three (3) advance payments of tax:

• the first being made not later than the end of the calendar or fiscal year (33 1/3 % of the estimated tax payable).
• the second payment within three months after the end of the fiscal year (33 1/3 % of the estimated tax payable). The total of the first and second payments should be equal to 66 2/3% of the estimated liability for the year. 
• the third payment must be made within seven (7) months from the end of the company's fiscal year. Where a return of income has not been lodged or if lodged, an assessment has not been issued, the balance of tax is payable within seven (7) months after the end of the company's fiscal year. Hence, 100% advance tax is payable before seven (7) months.

The advance payment will be allowed as a credit against the tax due on assessment.