Funds are generally established not for profit making. Therefore funds are taxed the same way as non-profit making organisations (see non – profit organisations). However pension funds are treated differently as follows;

Approved Pension Funds

Pension funds registered under the Pension and Provident Fund Act and approved by the Commissioner General are not liable to tax. According to the Income tax Act, any pension contribution towards an approved pension fund by an employee is allowed as a tax deductible allowance provided that the amount is not more than 15% of the employee’s salary. 

Unapproved Pension Funds

Pension funds that are not approved by the Commissioner General are taxable at the rate of 7.5%. Any pension contribution towards these funds is not an allowable tax deduction.