Section 20, The Finance Act, 2013

Section 117 of the Income Tax Act, 2000 is repealed andreplaced by the following new section– 117 (1) Where a person makes a payment referred to in subsection (2), the person shall withhold tax– (a) in the case of a payment to a resident of Sierra Leone , at the rate prescribed in Part IV of the First Schedule; (b) in the case of a payment to a nonresident, at the rate prescribed in Part II of the Second Schedule. (2) The payments referred to in subsection (1) are – (a) service fees with a source in Sierra Leone irrespective of whether the recipients are resident or non-resident; (b) insurance premium with a source in Sierra Leone paid to a non-resident person; (c) other payments made under a contract including management fees and other remittances. (3) The tax otherwise payable by a contractor on income from which tax has been withheld under this section shall be reduced by the tax withheld under this section. (4) For the purpose of this section “service fee” means a payment to the extent to which, based on market values, it is reasonably attributable to services rendered by a business. (5) Subsection (4) shall not apply to payments made by a person to a contractor during a month in which the person pays a total of Le 500,000 or less to the contractor. (6) Subject to subsection (1) of section 130, all withholding agents shall submit monthly withholding tax returns including Pay As You Earn (PAYE )returns in the prescribed form showing details of the gross amount of payments and the related withholding taxes. 20 21 117 of Act 2000. “Service fee and contract payments. (6) A person who fails to file a Pay As You Earn(PAYE) and other withholding tax returns on the due date without the written approval of the Commissioner-General or an authorized official commits an offence and shall be liable to a fine not exceeding Le 1,000,000.00 or ten percent of the tax payable or whichever is the higher or upon conviction to imprisonment for a term not exceeding one year or to both such fine and imprisonment.”