Taxes can be counted on to go up from time to time. It’s like a tube of toothpaste. Some Governments squeeze from the bottom while others squeeze from the top. And while all Governments promise to put the cap back on, sooner or later it gets a bit messy.
This time the squeeze is from the top. If your income from all sources in the year beginning April 1st 2021 is in excess of $180,000, then any income beyond that figure will be taxed at a rate of 39 cents in the dollar, which is up from 33%. If you are affected, you will need to notify your bank or investment providers, where they deduct Resident Withholding Tax (RWT) from your interest and dividends, and instruct them to apply the 39% rate. This is the ‘painless’ method if you do not wish to make up the difference as terminal tax.
Taxes can be counted on to go up from time to time. It’s like a tube of toothpaste. Some Governments squeeze from the bottom while others squeeze from the top.
However you may choose to keep the rate at 33% if you are already subject to existing provisional tax arrangements, and fork out the additional tax owing by the due dates. If you’re not sure about the tax implications, talk to your accountant.