Rules on the determination of additional penalties under the Revenue Acts

The Determination of Additional Penalty Rules, 2025 have been enacted pursuant to L.N. 177 of 2025. These rules, issued under the DUTY ON DOCUMENTS AND TRANSFERS ACT, the INCOME TAX MANAGEMENT ACT and the VALUE ADDED TAX ACT, establish the manner in which the additional penalty referred to in article 68 of the Duty on Documents and Transfers Act, article 52A of the Income Tax Management Act and article 84A of the VAT Act is to be determined.

Article 68 of the Duty on Documents and Transfers Act, article 52A of the Income Tax Management Act and article 84A of the VAT Act introduced a ‘special mechanism for out of court settlements’ of disputes with the MTCA by way of a special agreement between the taxpayer and the Commissioner for Tax & Customs, involving additional penalties comparable to the amounts which would be payable as fines in criminal proceedings involving financial crime. See MIT News 12 August 2025.