Gov’t looks to collect taxes up front from private sector suppliers + contractors

All government bodies will now deduct and set aside a part  of VAT and schedule tax from any contracts they have with private sector vendors ahead of payment under a Tax Authority directive, according to a cabinet statement.

The decision requires government bodies to deduct 20% of the VAT (which is currently at 14%) and the entirety of the “schedule tax” (a separate variable rate that applies to some goods and services) from the value of the contract before paying out the contractor, and automatically funnelling the tax money to the Tax Authority within a month.

Companies remain responsible for remitting the balance.