The business community, particularly large taxpayers, has expressed concerns regarding the implementation of the newly enacted income tax proclamation.
The Ministry of Finance recently announced that the amended income tax law took effect at the beginning of the current budget year on July 8. However, taxpayers who spoke to Capital reported that tax authorities are insisting they file their profit tax declarations under the new proclamation, which aims to increase government revenue.
Level A taxpayers—those in the highest tax bracket—reported that when they approached the tax authority to declare their profit tax for the previous budget year (which ended on July 7), their filings were rejected.
“They informed us that our tax liability must now be calculated under the new proclamation, effective July 8. However, we believe this should apply only to the current budget year, not to the tax year that has already concluded,” the frustrated taxpayers stated.
The amended proclamation introduces a minimum tax alternative, requiring businesses to pay income tax equivalent to at least 2.5% of their total annual turnover, regardless of declared profit.
Taxpayers told Capital that authorities are pressuring them to revise their declarations in line with the new rules. One businessman involved in large-scale import-export operations explained that, despite processing high-value transactions, his company has slim profit margins.
“For the current budget year, we will comply with the new law and prepare for the minimum tax requirement. However, our company cannot bear the additional tax burden demanded for transactions completed in the previous budget year—before the law even took effect,” he said.
Another businessperson echoed this sentiment: “We understand that the new law applies moving forward, and we will adjust accordingly. However, applying it retroactively is unreasonable.”
They urged the Ministry of Finance to intervene in the dispute between taxpayers and revenue authorities, arguing that enforcing the new law on past transactions is unfair.
“Applying a law retroactively to transactions that occurred before its enactment creates significant difficulties,” they emphasized.
The business community is now calling for clearer guidance and dialogue to resolve the issue without imposing undue financial strain on enterprises.
Taxpayers in different categories must settle their profit tax from July 8 to November 9, 2025, for the 2024/25 budget year.
