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Income Tax (Amendment) Act 1993

REPUBLIC OF KIRIBATI

INCOME TAX AMENDMENT ACT 1993
(No. 3 of 1993)

I assent,

(Sgd: T. Teannaki)
Beretitenti
5/7/1993

AN ACT TO AMEND THE INCOME TAX ACT 1990;
AND FOR CONNECTED PURPOSES

Commencement:
1993

MADE by the Maneaba ni Maungatabu and assented to by the Beretitenti.

Short Title and commencement

1. This Act may be cited as the Income Tax (Amendment) Act 1993 and shall be deemed to have come into operation on 1 January 1993.

Interpretation

2. In this Act, unless otherwise requires, "principal Act" means the Income Tax Act 1990.

Amendment of section 3

3. Section 3 of the principal Act is amended by repealing subsection (3) and substituting the following subsection -

"(3) This Act binds the Republic and for the purposes of this Act, unless the context otherwise requires, "person" includes the Republic".

Amendment of section 11

4. Section 11 of the principal Act is amended by adding the following subsection -

"(6) Where a taxpayer changes the method of accounting for foreign currency under subsection (5) the taxpayer shall make adjustments to income and deductions of the current and past tax years as the Board considers reasonable."

Amendment of section 23

5. Section 23 of the principal Act is amended by -

(a) renumbering the section as section "23 (1)"; and

(b) adding the following subsection -

"(2) Without prejudice to subsection (1), any distributions of such club, mutual insurance company, or other similar body that would otherwise be treated as dividend shall not be denied an income character for the purposes of this Act on the basis of the doctrine of mutuality."

Amendment of section 34

6. Section 34 of the principal Act is amended by -

(a) by repealing subsections 2, 5, 8, and 9;

(b) by repealing the word "(3)" occurring in line one of subsection (4) and substituting the word "(2)";

(c) by repealing the words "paragraph 1 of" occurring in line 4 of subsection (4); and

(d) by renumbering -

(i) subsection "(3) as subsection "(2)";

(ii) subsection "(4)" as subsection "(3)";

(iii) subsection "(6)" as subsection "(4)";

(iv) subsection "(7)" as subsection "(5)";

(v) subsection "(10)" as subsection "(6)";

(vi) subsection "(11)" as subsection (7)";

(vii) subsection "(12)" as subsection "(8)"; and

(viii) subsection "(13)" as subsection "(9)".

Amendment of section 37

7. Section 37 of the principal Act is amended by adding the following subsection-

"(5) For the purposes of this section "property income" shall not include interest income".

Amendment of section 46

8. Section 46 of the principal Act is amended by adding the following subsection -

"(5) Where a taxpayer's principal source of income is from employment, the deductions under sections 47, 48 and 49 shall be reduced in accordance with subsection (3) on the basis that the period of assessment is that part of the year during which the taxpayer is employed."

Amendment of section 47

9. Section 47 of the principal Act is amended as follows -

(a) by repealing the words "$900" in subsection (1) and substituting the words "the amount specified in paragraph 1 of the Schedule 9"; and

(b) by repealing the words "$1700" in subsection (3) and substituting the words "the amount specified in paragraph 2 of the Schedule 9".

Amendment of section 48

10. Section 48 of the principal Act is amended as follows -

(a) by repealing the words "$900" in subsection (1) where it first occurs and substituting the words "the amount specified in paragraph 3 of Schedule 9";

(b) by repealing the words "$900" in subsection (1) where it next occurs and substituting the words "that amount"; and

(c) by repealing the words "$900" in subsection (2) and substituting the words "the amount specified in paragraph 3 of Schedule 9".

Amendment of section 50

11. Section 50 of the principal Act is amended by adding the following subsection -

"(7) For the purposes of subsection (3), the education deduction shall also be reduced where pursuant to an agreement within section 78(1)(d) an education allowance is paid to a taxpayer which is exempt from tax pursuant to such agreement."

Amendment of section 52

12. Section 52 of the principal Act is amended by repealing the words "$100" wherever it occurs and substituting the words "$250".

Insertion of new section 63A

13. The following section is inserted immediately after section 63 -

"Partial termination of trusts

63A. (1) Section 63 shall apply to the partial termination of a trust.

(2) For the purposes of section 63, a trust shall be treated as partially terminated where there is a payment to beneficiaries of the corpus of the trust or where there is a payment to beneficiaries which is unusual in amount."

Amendment of section 73

14. Section 73 of the principal Act is amended -

(a) by repealing the words "the rate of 40%" from subsection (6) and substituting the words "the maximum tax rate applied to the chargeable income of resident individuals under Schedule 1";

(b) by adding at the end of subsection (7) the words "and individuals who are relatives or associates are to be counted as one person"; and

(c) by adding the following subsection -

"8 Subsection (3), (4), (5) and (6) shall not apply to any tax year where the tax rates for companies under Schedule 2 are no less than the tax rates for resident individuals under Schedule 1 (disregarding any personal deductions, individual tax rebates, chargeable income taxed at a nil rate and chargeable income of less than $50,000 taxed at a rate exceeding the company rate on such income by 5% or less)."

Amendment of section 76

15. Section 76 of the principal Act is amended as follows -

(a) by deleting paragraph (a) of subsection (1); and

(b) by inserting the words "(other than interest income)" in paragraph (b) of subsection (1) after the words "property income".

Amendment of section 80

16. Section 80 of the principal Act and its heading are repealed and the following heading and section are substituted -

"Income of Government exempt

80. Income of the Republic of Kiribati and any local government council shall be exempt from income tax."

Amendment of section 83

17. Section 83 of the principal Act is amended by adding the following subsection -

"(5) A life insurance policy shall not be prevented from falling within subsection (1) or (3) by the fact that -

(a) it covers the life of the spouse of the employee or taxpayer and not the employee or taxpayer;

(b) it covers other lives in addition to those permitted under subsection (1) and (3) and paragraph (a); or

(c) it is for the benefit of other people in the event that the employee or taxpayer, and any spouse and child of the employee or taxpayer are deceased."

Amendment of section 93

18. Section 93 of the principal Act is amended by deleting subsection (3) and substituting the following -

"(3) Subsection (9) of section 114 applies to this section and in its application shall extend to contesting the amount of income tax for which no assessment has been issued at the time of application of section 93(1) or (2)."

Amendment of section 107

19. Section 107 of the principal Act is amended as follows -

(a) by adding the words "or to the Court of Appeal" after the words "105" occurring in the second line of subsection (2);

(b) by repealing subsection (4) and substituting the following subsection -

"(4) Notwithstanding any other provision of this Act, the Board may, on the ground of a person's imminent departure from Kiribati, demand the immediate payment of any tax under an assessment and the tax shall be due and payable accordingly"; and

(c) by repealing the words "assessed to tax" in subsection (5) and substituting the words "to whom a demand is made".

Amendment of section 113

20. Section 113 of the principal Act is amended as follows -

(a) by repealing the words "Instalment payments of tax" in the section heading and substituting the words "Provisional tax payable";

(b) by repealing the words "three instalments of tax on that income" in lines 2 and 3 of subsection (1) and substituting the words "a provisional tax on that income by 3 instalments";

(c) by repealing the words "3 instalments of tax" in subsection (2) and substituting the words "a provisional tax by 3 instalments";

(d) by inserting the words "payment by" between the word "each" and "instalment" in the first line of subsection (3);

(e) by inserting after subsection (3) the following subsections -

"(3A) Where rates of tax are changed, the average rate of tax referred to in subsection (3) shall be the percentage that the income tax, after any foreign tax credit, would bear to the chargeable income in the most recent assessment received by the taxpayer if the new rates of tax had applied for the tax year to which the assessment relates.

(3B) Where a taxpayer has not received an assessment of tax, the Board may estimate the taxpayer's chargeable income for the tax year and any payment of the provisional tax payable under subsection (1) or (2) shall be one quarter of the amount of tax calculated by applying the appropriate tax rate scale for the taxpayer to that estimated chargeable income less the amount of tax estimated by the Board to be to be referable to income subject to withholding of tax under Part XVII";

(f) by repealing the word "instalment" and substituting the word "payment" occurring in the first line of subsection (5);

(g) by inserting the words "of a provisional tax" occurring between the words "instalment" and "payable" in the first line of subsection (5);

(h) by repealing the word "instalment" occurring between the words "any" and "of" in the first line of subsection (6);

(i) by repealing the word "instalment" occurring in the first line of subsection (7) and substituting the words "payment for the provisional tax";

(j) by repealing the word "instalment" occurring in paragraph (a) of subsection (7) and substituting the word "payment";

(k) by repealing the word "instalment" occurring in the first line of subsection (8) and substituting the words "payments for the provisional tax"; and

(l) by repealing the word "instalment" occurring in paragraph (b) of subsection (8) and substituting therefor the words "payment for the provisional tax".

Amendment of section 114

21. Section 114 of the principal Act is amended -

(a) by inserting the words "bank of any other financial institution, or any other" in paragraph (1)(b) before the words "person owing"; and

(b) by inserting the words "or having derived" after the words "person deriving" wherever occurring in this section.

Amendment of section 116

22. Section 116 of the principal Act is amended by repealing the words "including the Republic" in subsection (1).

Amendment of section 117

23. Section 117 of the principal Act is amended by repealing the words "including the Republic" in subsection (11).

Amendment of 118

24. Section 118 of the principal Act is amended by repealing the words "including the Republic" in subsection (1).

Amendment of section 129

25. Subsection (5) of section 129 of the principal Act is repealed and the following subsection substituted -

"(5) Notwithstanding the secrecy provisions of the Internal Revenue Board Act and section 133 of this Act, the Board may disclose the tax file number of a taxpayer to any person in the performance of its function under, or in connection with this Act or any other Act or as required by any other legal duty".

Repeal

26. Regulations 4, 5, 6, 7, 9 and 12 of the Income Tax Regulations 1990 are hereby repealed.

New Schedule 9 added

27. After Schedule 8 of the principal Act, the following Schedule is added -

"SCHEDULE 9

(Sections 47, 48)

Personal deductions

(1) The personal deduction for the purposes of section 47(1) is $900.

(2) The personal deduction for the purposes of section 47(3) is $1700.

(3) The personal deduction for the purposes of section 48 is $900".

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