The Government has introduced a new income tax relief for individuals who are starting a business for the first time under the presumptive tax regime.
The new rules are contained in the Income Tax (Presumptive Tax Relief for New Traders) Regulations, 2026, published as Government Notice No. 158B on 30 June 2026. The Regulations came into operation on 1 July 2026.
The new measure provides qualifying new traders with a 12-month income tax relief. However, the relief is not automatic.
The Regulations set out who can qualify, how a person must apply, how the application is decided, what happens if the business is transferred, what information must be reported, when the relief can be revoked and how a taxpayer can challenge a decision.
Understand what is Presumptive Tax Regime" this is the simplified tax system applicable to individual based on annual turnover thresholds as prescribed under the Act. And Tax relief” is a relief from paying income tax as provided by the law.
The relief is intended for a newly registered individual taxpayer who has been issued with a Taxpayer Identification Number (TIN) for the purpose of conducting business for the first time.
The relief is connected to the presumptive tax regime, which is the simplified tax system applicable to individuals whose annual business turnover falls within the turnover limits provided under the Income Tax Act.
A person must meet three main conditions to qualify
A person who is applying for a TIN to start a business and wishes to claim the relief may apply to the Commissioner electronically. The application is therefore part of the formal process for obtaining the benefit.
The applicant must support the application with a statutory declaration confirming that the business is new and will operate exclusively under the presumptive tax regime.
The applicant must also provide a detailed description of the business activity and a statement of the projected annual turnover. The Commissioner may require any other relevant information considered necessary for determining the application.
The statutory declaration requires the applicant to formally confirm that the business is new and that it will remain under the presumptive tax regime. This places responsibility on the applicant to provide truthful information when seeking the relief.
Once an application has been received, the Commissioner has 7 seven working days to review it. During this period, the Commissioner may verify the applicant's credentials and, where necessary, conduct due diligence on the declaration and information provided.
If the Commissioner is satisfied that the applicant qualifies, the Commissioner will issue a tax relief certificate.
The certificate is the formal confirmation that the relief has been granted. This means that submitting an application is not the same as receiving approval.
The Commissioner is therefore not required simply to accept the information in the application without verification.
If the Commissioner determines that the applicant does not qualify, the refusal must be given in writing and he must state the reasons for such refusal. This gives the applicant a clear explanation of why the relief was not granted.
The rules also cover situations where an identical or substantially similar business operates at the same physical location within 180 days after the previous business ceased.
The purpose is to prevent the relief from being repeatedly obtained through changes in names, ownership or business arrangements.
An individual shall not transfer, sell, lease, or assign ownership of the business to another person a right to tax relief granted under these Regulations.
Where an individual transfers, sells, leases, or assigns ownership of the business to another person the rights to tax relief shall cease and taxes due shall become payable as if the relief was not granted.
An individual utilizing the tax relief shall, within thirty days prior to the expiration of the twelve-month tax relief period, submit an end of tax relief turnover declaration to the Commissioner.
The Commissioner may revoke an approved relief if the taxpayer obtained it through fraud, misrepresentation or concealment of a material fact.
The relief may also be revoked if the taxpayer engages in a chaining arrangement, fails to operate exclusively under the presumptive tax regime or willfully fails to maintain primary records of sales.
These requirements continue to apply after the relief has been granted. Approval therefore does not remove the taxpayer's responsibility to comply throughout the relief period.
Where the Commissioner proposes to revoke the relief, the taxpayer must first receive a notice to show cause.
The notice requires the taxpayer to explain in writing why the relief should not be revoked. The taxpayer has 14 days to submit the written representations.
This gives the taxpayer an opportunity to respond to the issue before the Commissioner makes the final decision.
After receiving the taxpayer's representations, the Commissioner must make a decision within 14 days and serve that decision on the taxpayer. The Commissioner therefore has to consider the taxpayer's response before deciding whether the relief should continue or be revoked.
If the taxpayer fails to submit representations within the 14-days period, the Commissioner may proceed with revocation.
The same applies where the taxpayer submits representations but the Commissioner considers them unsatisfactory. In either situation, the Commissioner may issue a written order revoking the relief.
The Regulations provide that the revocation terminates the tax relief with immediate effect.
A person who is aggrieved by a decision of the Commissioner under these Regulations may file an objection in accordance with the Tax Administration Act, Cap. 438.
This provides a legal avenue for a taxpayer who believes that a decision affecting the relief is wrong. The taxpayer must follow the objection procedure and requirements provided under the Tax Administration Act.
not respond or the response is considered unsatisfactory, the relief may be revoked with immediate effect.
Where the taxpayer is still aggrieved by the Commissioner's decision, the taxpayer may use the objection procedure provided under the Tax Administration Act.
1. Eligibility Assessment, assess whether your business meets the legal requirements for the 12-month tax relief.
2. Application Assistance, assist with preparing the application, statutory declaration and required supporting information.
3. Compliance Advice ,advise on the conditions that must be maintained throughout the 12-month relief period.
4. Revocation Response , if you receive a notice to show cause, assist in preparing and submitting your response within the prescribed 14 days.
5. Objections and Disputes , Advise and represent you where you are aggrieved by a decision of the Commissioner, including assistance with the applicable objection process.
6. Business Transfer Advice, advise on the tax consequences of selling, transferring, leasing or assigning your business during the relief period.
7. Chaining Arrangement Advice, Review proposed business structures or changes in ownership to identify potential issues under the rules on chaining arrangements.
8. Turnover and Record-Keeping Compliance, Advise on the end-of-relief turnover declaration and the maintenance of required sales records.
Government Notice No. 158B introduces a structured 12-month income tax relief for qualifying new individual traders operating under the presumptive tax regime. The relief is designed to support genuine new businesses while preventing the benefit from being repeatedly used through artificial arrangements.
The Regulations provide a clear process from application to approval and from compliance to possible revocation. They also give taxpayers an opportunity to respond before the relief is revoked and provide a right to object against a decision of the Commissioner.
As lawyers, we at Darstate Attorneys, our responsibility is to ensure that we guide and advise you on the basic principles and legal procedures in promoting your business, whether be it a service or a product.
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