Notice to the Employers and Employees
Deduction of Tax on Cumulative Income from Employment for the Period 01.01.2020 – 31.03.2020
As you are already informed by the Inland Revenue Department (IRD) by its notice under the reference No. PN/IT/2020 – 03 (Revised) dated 06.04.2020 published in line with the instructions issued by the Ministry of Finance, subject to formal amendments to the Inland Revenue Act, No. 24 of 2017 (IRA), mandatory requirement under Section 83 of the IRA for deduction of Withholding Tax (WHT) on employment income under Pay-As-You-Earn (PAYE) Scheme by the employer on the employment income of a resident employee is removed with effect from 01.01.2020 and deduction of Advance Personal Income Tax (APIT) is replaced in lieu of PAYE tax with effect from 01.04.2020 on an optional basis.
However, considering the inconvenience faced by the employees in making their tax payments of the tax liability on employment income for the period from 01.01.2020 to 31.03.2020, employers are allowed to make the tax payment of employees under PAYE scheme either by deducting from their remuneration of respective employees or by any other manner, with the consent of respective employees.
Accordingly, the employers can make the payment of tax by computing the tax liability of respective employees as set out in the table given along with this notice.
Duly computed tax liability and the amount of tax deducted from the remuneration (or as per any alternative arrangement) must be remitted as PAYE tax payment on or before 15th May 2020 and relevant details of such liability/payment shall be declared in the PAYE Return of the employer for the Year of Assessment 2019/2020 which is due to be submitted on or before 30th April 2020.
For making tax payments to the IRD, please refer to the notice under the reference No. PN/PMT/2020-1 dated 08.04.2020 published by IRD.
