Agency: With the National Assembly (NA) endorsing a 10% tax on interest income from fixed deposit interest income above Nu 300,000, the big question is how will the tax be levied after 1st January 2026 when the tax becomes effective.The worry is especially for those who may have a long-term fixed deposit that may mature after 1st January 2026.
Here, an official from the Ministry of Finance (MoF) said that all the interest income earned till 31st December 2025 will not be taxed.
For example, if a person put a Nu 5 million fixed deposit in December 2016 at 8% interest rate for 10 years, then it should mature by December 2026.
The official explained that firstly the Nu 5 million (mn) principal will not be taxed at all. Then the 8% fixed deposit interest income till 31st December 2025 will be exempt from the 10% tax and the interest income from January to December 2026 will only be taxed 10%.
This means that the total interest income is Nu 4 mn for 10 years at the rate of Nu 400,000 per year. The interest income for 9 years at Nu 3.6 mn will not be taxed as it falls before 1st January 2026. Only the 400,000 interest income earned in 2026 will be considered for taxation but since there is a Nu 300,000 exemption of the Nu 400,000 only Nu 100,000 will be taxed 10% at Nu 10,000.