The New Income Tax Law published in the Official Gazette last April gives more clarity to the definitions of who is an employee or a consultant when computing personal income tax, corporate income tax and withholding income tax. “An employee is any person who undertakes to work for another person for payment, under the supervision and in accordance with directives of his/her employer in relation with his/her work,” Article Three of chapter One of the new code, which came into force in April of 2018 reads in part. This unambiguous definition was lacking in the previous law hence creating an enabling environment for fraudulent tax. In some cases, employees would prefer to define their services to the employer as non-registered consultants thus not eligible to progressive rates applicable to employees. In this case, companies would retain 15% of Withholding Tax from payments to ‘consultants’ instead of subjecting them to progressive rates regarding pay as you earn. The law also defines a liberal profession as a profession exercised on the basis of special skills, in an independent manner, in offering services to the clients. Liberal professionals or consultants are therefore excluded from lump sum and flat tax regimes as they are able to keep books of account and declare and pay taxes basing on the real income. The two definitions in the law came to give clarification and close loophole identified in the previous income tax law and permit the tax administration to collect more revenues especially pay as you earn (PAYE) and Personal Income Tax (PIT), which was avoided by some taxpayers under the disguise “registered individual consultant”; in this case they would not be charged withholding tax of 15% because they were registered nor Pas As You Earn because they were not considered employees.