Who is a self-employed person?
If you work for yourself and if you are responsible for setting the charges for the goods or services you provide, you are a self-employed person. Examples of self - employed persons include:-
- Professionals in private practice i.e. Doctors, Lawyers, Accountants, Engineers, etc;
- Minibus Owners;
- Contractors/Sub Contractors;
- Real Estate Agents;
- Shop Owners/Stall holders;
Are Expenses allowed as a deduction from MY income earned?
Yes. You are allowed to deduct expenses incurred to produce that income and include the following:
- Salaries and wages paid;
- N.I.S. paid on behalf of employees;
- Bank interest and charges;
- Stationery, postage and stamps;
- Rent, rates and taxes;
- Motor vehicle operating expenses;
- Electricity and telephone;
- Maintenance of plant, machinery and equipment.
IS Wear & Tear on my vehicles and machinery allowed when calculating my taxes?
Wear and Tear expenses are deducted when calculating the income on which you have to pay taxes. However, the equipment, machinery or vehicles must be used in carrying out your business.
What expenses are not allowed?
Certain expenses are not allowed as a deduction from the income earned. Some of these include:
- Domestic and private expenses e.g. school children fees, electricity charges for residential purposes;
- Any disbursement or expenses not being money wholly and exclusively expended or lay out for the purpose of acquiring the income;
- Any capital employed in improvements, except land development expenditure incurred for agricultural purposes and allowed to be expressed against income over a period of ten (10) years;
- Any capital withdrawn or any sum employed or intended to be employed as capital;
- Any sum recoverable under an insurance or contract of indemnity;
- Rent of, or cost of repairs to any premises or part of premises not paid or incurred for the purpose of producing the income;
- All Income, Property and Capital Gains Taxes.
What accounts and records should be kept?
These accounts and records must show particulars of -
- All purchases;
- All gross receipts and gross sales;
- Any sum received or expended and the transaction to which the receipt or expenditure relates;
- Any allowances for wear and tear on plant, machinery, equipment or building, which is used in the business;
- All accounts, held at any bank for the relevant period including bank statements;
- All assets and liabilities;
- Any payments made to any person or company out of Guyana;
- Shares held or owned by any person resident in Guyana;
- Annual stock-taking (Inventory)
When do I have to submit my Income Tax Return?
Income Tax Returns must be submitted on or before April 30 of each year for the income earned in the previous year. For example, a Return for the Year of Income 2008 must be submitted on or before April 30, 2009.
What happens if the return is submitted after April 30?
There are penalties for filing your Income Tax Return after April 30. If you submit your Return late, you can be asked to pay an additional two- percent (2%) of the tax assessed. If you do not submit the Tax Return at all, you will receive a Demand Notice from the Commissioner- General, GRA. The penalty is five percent (5%) of the tax assessed if you do not submit your return within the time specified in the Demand Notice.
What applies to persons in business for the first time this year?
If you are in the first year of business, then you must estimate your profits for the first year, calculate your expected taxes and pay your quarterly installments accordingly.
How arethe quarterly installments worked out?
As a self employed person, you need to pay your income tax on a quarterly basis. The Taxes paid each quarter are based on the previous year's income as reported in your Income Tax Return. You divide your total Taxes for last year by four and that will give you your Quarterly Installments for the current year.
What happens if my profits this year will be less than last year's?
If you are of the opinion that your profits this year will be less than that of last year, you should apply to the Commissioner-General, GRA for a revision of the amount of tax you are required to pay each quarter.
GUIDE TO CALCULATING INCOME TAX FOR SELF EMPLOYED PERSONS CAN BE FOUND HERE