Category Archives: TAX RISK

URA AND USED CAR IMPORTERS; WHAT ARE THE OPTIONS FOR AGGRIEVED TAXPAYERS?

I would appreciate the tax administration expediency URA finds in attaching uniform valuations to all motor vehicle imports and lends credence to my own speculation that the reason why URA has so far avoided the opening of this pandora’s box at all costs is to keep government’s cost of customs duty administration under this head low. 

It also appears the tax body foresees a drop in customs duty collection from used motor vehicle imports hence their insistence on maintaining this system even when the courts have pronounced themselves on the legality of the same. 

The little or no public debate and commentary by technical people like myself for all these years has also so far saved the tax body the headache that comes with having to deal with hundreds of objections and litigation that would have arisen from objections by motor vehicle importers of all sizes and categories against import duty assessments but I think this will no longer be the case, because the law is the law. I implore the commissioner to desist from shifting goal posts in enforcement when it does not favour the government.

GOLDSTAR INSURANCE LTD v URA; A COMPLIANCE ALARM BELL FOR THE UGANDAN INSURANCE INDUSTRY.

As a result of the decision, complications may now arise as to the accounting and tax treatment of these commissions in the books of the resident taxpayer if the entire premium is now taxed as the income of the non-resident re-insurer, bearing in mind that this is not a final tax.

The decision raises yet another headache for the insurance industry in regards to VAT on importation of services. Although not traversed as an issue as there was no dispute in this regard, the tribunal mentioned in passing that whereas a supply of re-insurance services by resident companies are VAT exempt, this wasn’t the case where a Ugandan insurance company sought to import the re-insurance service. I therefore anticipate that URA may seek to raise assessments in this regard in the future.

TAX NON-COMPLIANCE RISK IN CREDIT TRANSACTIONS: THE IMPORTANCE OF KYC TAX COMPLIANCE DUE DILIGENCE FOR FINANCIAL INSTITUTIONS.

The multifaceted nature of risk mitigation for banks means that SMEs (small and medium-sized enterprises) not only need business and risk advice, but they also require ongoing guidance to align with the constantly evolving commercial regulatory and compliance landscape in corporate governance and taxation. Without this continuous alignment, there will be a disconnect between the risk tolerance of banks and the actual realities faced by the SMEs and create a lose-lose situation for both sides.

And so SMEs need constant advice and alignment with evolving requirements to ensure that their risk profile matches the expectations of the banks they seek credit from and banks must expand their scope of KYC due diligence to include both governance and tax compliance due diligence at deal stage.

The Sadolin case and Judicial Review in taxation disputes. Where’s the line?

MARK RUHINDI High Court has issued an Order of Certiorari in SALIM ALIBHAI & 9 OTHERS v URA MISC CAUSE NO. 123 OF 2020, quashing the commissioner’s decision revoking the Private Ruling in respect of the sale of shares by the former shareholders of the Sadolin Ltd (now Kansai Plascon ltd) without according them aContinueContinue reading “The Sadolin case and Judicial Review in taxation disputes. Where’s the line?”