The Act introduces a reduced corporation tax rate of 15% for companies that are newly incorporated to carry out local assembly of motor vehicles. The reduced rate is applicable for the first five years from the date of commencement of operations. Provided that the rate shall be extended for an additional period of five years if they achieve a local content of 50% of the ex-factor value of the motor vehicles.
In line with the changes to the PAYE bands, the Act enhances the tax bands for taxation of withdrawals from NSSF, registered pension funds and provident funds (before the expiry of fifteen years from the date of joining the fund) where the withdrawals are in excess of the tax-free amounts specified under Section 8(4) and 8(5) of the Income Tax Act, in any one year.
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