Capital gains tax rates spike for organisations and individuals following new legislation

The headline Capital Gains Tax (CGT) rate on trusts, unit trusts, mutual funds, and non-governmental organisations increased from 10% to 30% following the parliamentary passage and certification of the Inland Revenue (Amendment) Act No. 11 of 2026, according to a KPMG Tax News Flash report.

The legislative enactment triggered immediate rate hikes, raising CGT for individuals and partnerships from 10% to 15%, while trusts, unit trusts, mutual funds, and NGOs saw their rates jump from 10% to 30%, the report noted.

The CGT applies directly to profits realised during asset disposal and represents the exact difference between sale proceeds and the underlying cost basis.

Organisations face a mandatory 30-day window to complete the relevant tax filings, the report further noted, specifying that the CGT Return serves as a self-assessment for the tax paid.

The required CGT payment and the accompanying Return require submission to the IRD within 30 days after the conclusion of the calendar month when the asset realisation occurred, the report said.

The legislative update expanded the scope of the income Withholding Tax (WHT) to encompass additional professions, including personal trainers, coaches, valuers, artists, actors, dancers, singers, musicians, event organizers, photographers, videographers, therapists, counselors, beauticians, cooks, electricians, dentists, veterinarians, social media specialists, brand ambassadors, sportspeople, IT specialists, advertising agents, advisors, translators, writers, and debt collectors.

Withholding agents must supply certificates to liable payees verifying the exact tax amount deducted and remitted on their behalf, a document necessary for payees to claim credit against final tax liabilities.

These withholding tax certificates require distribution by agents to payees at no cost, taking effect immediately from the enactment of the Act.

Failing to deduct WHT at the prescribed rate, neglecting to remit the funds to the IRD, omitting the required certification, or submitting false declarations subjects non-compliant agents to penalties reaching up to Rs 200,000 annually, the report concluded.