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SUSPECTED FOOT AND MOUTH – TAX CONSIDERATIONS
A thread
http://thetaxplatform.tax/2020/10/14/suspected-foot-and-mouth-tax-considerations/
A thread
http://thetaxplatform.tax/2020/10/14/suspected-foot-and-mouth-tax-considerations/
In the past 2 weeks there has been reports that there is suspected foot and mouth outbreak in the Ngamiland area.
Where commercial farmers are affected the cattle sometimes die of the disease or in the absence of vaccines the government may decide that the affected animals be killed.
The animals lost as a consequence of the disease are business losses and qualify for deduction under the Income Tax Act. Therefore, the value of the animals lost will be deductible in the income statement or tax computation.
In a case where the animals were killed as a control measure by the government and compensation is offered, the amount of compensation will be added to gross income and become taxable.
But as most of the time the compensation is not market related, the losses incurred will be less than the compensation offered by the government and therefore less likely to result in the amounts becoming taxable.
Documentation in relation to the above is critical and farmers should ensure that everything relating to process of control of the disease is well kept.
Any vaccines and related administration services bought by the farmers to treat the disease is also a deductible expense and should be accounted for in the income statement as part of business expenses.
This thread can be read here: http://thetaxplatform.tax/2020/10/14/suspected-foot-and-mouth-tax-considerations/
