By Malik Jjigo
Masaka-Uganda
The Regional Manager of the Uganda Revenue Authority (URA) in Masaka has expressed concern about the inadequate record-keeping practices prevailing among the local business community.
Umar Mbuga, the Head of URA’s Masaka station, highlights that despite having more than 30,000 registered taxpayers in the area, less than 5 percent maintain proper records for their businesses which significantly hampers their ability to accurately assess their tax liabilities and entitlements.
Mbuga was attending a workshop organized by KACITA Uganda in collaboration with Masaka City Traders Association and Uganda Revenue Authority. Traders expressed their belief that URA exploits their inability to maintain proper business records, leading to overcharging.
According to Mbuga, this issue could be resolved if traders embraced the practice of good bookkeeping. Adopting better record-keeping practices would not only help traders accurately assess their tax obligations but also prevent any potential overcharge by the tax authority.
He emphasised the importance of good record-keeping practices, stating that it serves as a reminder of expenses and aids in effective budgeting for businesses. By maintaining proper records, business owners can have a clear understanding of their past and present financial status, which is crucial for making informed decisions.
Moreover, well-kept records also prevent complications during tax audits by URA when it comes to income tax returns.
In addition to promoting good record-keeping, Mbuga advised the business community to adopt fiscalised receipts issued through the Electronic Fiscal Receipting and Invoicing Solution (EFRIS).
“This digital system not only addresses tax administration challenges related to business transactions and issuance of receipts but also provides a reliable means to track sales made by the business,” he noted.
By embracing EFRIS, businesses can streamline their financial processes and enhance transparency in their operations, benefiting both the traders and the tax authorities alike.
However, there is a significant opportunity available to the business community through provisions inserted in the Tax Procedures Act 2014. According to these provisions, if a taxpayer settles their principal tax before the end of the year, they are eligible for a waiver on the payment of interest and penalties.
This means that by taking advantage of this leeway, businesses can save the money they would have otherwise paid in penalties and interests for other developmental purposes.
Starting from July 1st, taxpayers have the chance to make use of this beneficial provision. By promptly paying their principal taxes, businesses can free up funds that would have been allocated to penalties and interests.
This provides them with an opportunity to allocate those saved funds towards various developmental initiatives or investments within their enterprises. Mbuga encouraged the business community to seize this opportunity, as it could greatly support their financial stability and growth.
According to Thadeus Nagenda Musoke, the chairman of KACITA Uganda, the engagement between the business community and Uganda Revenue Authority (URA) has been beneficial. It has provided businesses with a better understanding of their tax obligations and the appropriate channels to address any challenges they encounter as taxpayers.
However, Nagenda also highlighted the importance of URA continuing to sensitize taxpayers about their obligations and the new taxes that have been introduced. This education is crucial to prevent clashes between taxpayers and the tax authority when it comes to tax payments.
He further mentioned that KACITA is in discussions with various stakeholders to advocate for a reconsideration of the taxes imposed on diapers. The public is reportedly dissatisfied with these taxes, and efforts are being made to address this concern with the aim of finding a more favourable resolution.
He mentioned that KACITA is currently involving their legal director to chart a path forward regarding the matter due to its potentially significant impact on numerous individuals in the future.
The budget process is still underway, and they are actively collaborating with their legal director to explore possible actions, as many people are dissatisfied with the passed decision. They find it unfortunate that the leaders didn’t seek their input, and they believe the decision was unjust. Nevertheless, they are resolute in their pursuit of fairness,” he further explained.
Kyambadde Muyanja, the chairperson of Masaka City Trader’s Association, urged the business community to embrace the practice of book record keeping. He emphasized that maintaining proper records would aid traders in achieving equitable tax payments.
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