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Business Tax Penalties and Additional Tax

Late Payment Penalty (LPP)
Additional tax imposed pursuant to subsection 123(1) of the Business Tax Act is referred to as “Late Payment Penalty” (LPP). However, irrespective of the terminology used, LPP imposed is additional tax imposed under subsection 123(1) of the Act.

The LPP is legislated at 20% per annum starting immediately after the date that the debt becomes due.


Late Lodgement Penalty (LLP)
Additional tax imposed pursuant to subsection 143(1) of the Business Tax Act is referred to as “Late Lodgement Penalty” (LLP). However, irrespective of the terminology used, LLP imposed is additional tax imposed under subsection 143(1) of the Act.

The LLP is legislated at an amount equal to the tax assessable or the amount of two thousand rupees (whichever is greater).


Omitted Income Penalty (OIP)
Additional tax imposed pursuant to subsection 143(2) of the Business Tax Act is referred to as Omitted Income Penalty (OIP). However, irrespective of the terminology used, OIP imposed is additional tax imposed under subsection 143(2) of the Act.

The OIP is legislated at a sum not exceeding double the amount of tax that would have been avoided if the return or answer had been accepted as correct.


See examples of penalties calculations.

Know more about
Exchange Of Information
Self-Assessment for Business Tax
The Self-Assessment System – Assessing your own tax liabilities
Value Added Tax
The Tax and Customs Agent Board (TACAB)
Lodgment of Partnership Business Tax Return
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