MARK RUHINDI
This edition of my newsletter is targeted at a special category of my audience and that is, colleagues in tax practice as well as students of taxation; especially those attending the law school tax class. I am often approached by students and young professionals at crossroads on how to proceed whenever a critical career or life decision has to be made and I am always eager and honored to offer my thoughts; And so last Friday, I had one such conversation with a young man(a lawyer) and one of the questions he posed is one that I have been asked many times now, which is; “What inspired you to pursue taxation/tax law?” Below are my three reasons;
1. My choice to pursue tax was no coincidence. It was an intentional decision I made even before I joined law school. As a younger business school graduate, one of the first roles I handled involved work around investment incentives. This was my first interaction with taxation and the realisation that every business decision and transaction carries a tax implication. I was therefore trying to address this knowledge gap I found myself struggling with.
2. Taxation is notorious for being a complex area of law. And so for many years Ugandan lawyers stayed far away from it because attending the tax class meant there was a higher chance of staying another year at law school. Makerere University at one point considered scrapping Revenue Law and Taxation as a course under the LLB program because students were not electing to attend the class, with some tax cohorts having less than 10 students out of a law class of 200+.
My own sister fell into this same trap and against my advice, she refused to do tax at law school because she feared she would stay behind another year. Fast forward, for her LDC clerkship I sent her to a tax firm and only days after reporting she was regretting her law school decision.
And so for a long time in this market, accountants were the undisputed kings of taxation until only recently when the area has received considerable interest from lawyers. This was expected since the economy needs tax professionals more than ever. And this was a motivator for me.
There’s always going to be work for a good lawyer who is well knowledgeable in taxation, and it doesn’t have to be in specialised tax practice. Infact, in every market the state employs the bulk of the brightest tax professionals, and the reason is simple; taxes are not voluntary, they are forced levies and the state must be able to outwit the taxpayer. This calls for placing the best in revenue administration since the deep pocket taxpayer is often well advised on tax planning and tax avoidance.
The complexity of tax law is heightened by humanity’s natural resistance to part with what we own. And so if a business claims to have no profit, the burden is on them to prove it through proper accountability. This intersection of law and accounting is what makes taxation an even more intriguing discipline. You will not easily become bored.
3. I understood early enough that in business, taxation is everything and now as a lawyer in commercial advisory, I consider other areas of business law bridesmaids to tax as opposed to the other way round; For any business, Tax risk exposure is the most dangerous since most often it is unascertained and unknown until the taxman comes calling with an audit and there is a dispute as to whether or not tax is due. You don’t see it coming until many years later and concluded certain transactions that were not de-risked or compliance mistakes have gone burst and had the implication of putting the business on the hook for a heavy liability that was never contemplated.
It is a tax lawyer to explain and defend these already concluded transactions. AND yet if the legal team or lawyer that advised the business on these transactions had been one with tax expertise, the transactions and generally the business would already have been structured and optimized for the best possible tax efficiency(i.e to pay the least tax possible).
I therefore hold the view that a lawyer who has chosen business law and commercial advisory as their career path(like I did), is not yet fully equipped without tax expertise. I would therefore strongly advise law students with business law practice ambitions in mind not to shy away from the tax class.
Email; mark@mrt.tax
Twitter; @MarkRuhindi
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