The commercial advantages of being exempt include better cash flow and working capital management; Exempt businesses easily avoid financial distress by taking some relief from the harshness of having to pay tax before it’s due; that is to say, before the obligation to file a final return and account for income tax, arises; which for non-individuals is 6 months after the end of the tax year.
Tag Archives: Tax lawyer
Webinar Invite: Overview of the Uganda Budget Highlights, 2024
Join us for an engaging and informative webinar where the MRT Tax and RSM Eastern Africa team will break down the Uganda Budget Highlights for 2024 and their tax and commercial implications to businesses.
NAVIGATING THE NEW TAX YEAR 2024-2025: KEY CONSIDERATIONS FOR BUSINESSES.
Enhanced focus on digital transactions
With the digital economy growing rapidly, tax authorities worldwide, including the URA, are paying more attention to digital transactions. E-commerce, digital services, and online marketplaces are becoming significant contributors to the economy, and they are now firmly on the tax radar. Businesses engaging in digital transactions should ensure they understand the tax implications and comply with the relevant digital services tax regime recently introduced under the VAT Act and the Income Tax Act.
A GOVERNMENT CONTRACTOR’S GUIDE TO DEEMED VAT.
Deemed paid VAT is a tax relief mechanism by which the government absolves a VAT trader from payment of the VAT charged by their customer on a VAT taxable transaction.
The deemed paid VAT relief is a commercially advantageous incentive that greatly improves cash flow resilience of businesses in the commercial chain of expensive infrastructure projects as well as those in capital intensive sectors owing to the fact that most often, these businesses must mobilise large amounts of capital from lenders or internally(shareholders) in order to be able meet the financing needs of executing such capital intensive projects. For this reason, it is therefore critical for taxpayers that fall under this category to properly grasp the deemed paid VAT principle and to understand its applicability and the commercial implications of this relief to their operations.
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.
Intersection of company law, taxation & insolvency; Corporate structure best practices
Corporate structure best practices for leveraged operations
A businessman who habitually takes on liabilities to finance capital requirements for his commercial activities ought to split those activities into different companies.
The sole purpose of trading through a company or companies is to trade with other people’s money, and so the thinner the capital the more advantageous from a commercial point of view and from a tax point of view. And so a smart businessman should be looking to separate key assets from the main trading activities by splitting the business.
The entity that borrows should be cash flow rich but asset poor. It is up to the banker/lender to protect itself through seeking guarantees or ordering a corporate reorganisation to curve risk before advancing large loans. But because the bulk of the bank’s work is done by non-lawyers, this hardly ever happens.
This opens up opportunities for the businessman to lay traps for the bank/lender and to open up escape routes for the business to fend off aggressive recovery if it ever gets to that point, and to get away through corporate law technicalities and in the meantime allow the business the much needed window to reorganise and mobilise funds to pay off debt before the business is taken down by the lender.
A TRADER’S SIMPLE GUIDE TO IMPORT VAT.
In the world of VAT, importation is considered a form of ‘value addition.’ When an item is imported, its value is enhanced because it has entered a new stage of the production or trade chain. It’s important to note that a product doesn’t have to be manufactured locally to be subject to VAT. As long as it plays a role in the extended production or trade chain that leads to a final consumer’s purchase of any good in Uganda, VAT applies to the transaction so long as it is not in respect of an exempt supply. This is where the concept of import VAT becomes significant, as it can be treated as an input tax credit to the benefit of the importer at compliance stage.
THE MRT TAX AND GOVERNANCE MASTERCLASS.
The training seeks to enable participants understand the nexus between governance and taxation and highlights some of the most critical governance and management traps and lapses to avoid going forward, in order to protect businesses from taxation troubles and other commercial risk with roots in governance, while highlighting through illustrations, tax planning strategies to employ in order to keep liabilities at a minimum.
The masterclass is also aimed at equipping participants with the right knowledge needed to adapt businesses to the complexity in tax compliance introduced by changes in revenue law and taxation over the the past few years starting with the year 2020.
TAX COMPLIANCE AND TAX POSITIONS; WHY IT MATTERS TO UNDERSTAND YOUR TAX POSITIONS.
Uganda operates a self assessment taxation system where the presumption is that the tax payer’s reporting is premised on the correct tax positions and that’s why tax problems never emerge immediately until years much later.
THE MRT TAX BANKING AND FINANCIAL SERVICES TAX RISK MASTERCLASS.
This training will be most beneficial to professionals in credit risk, legal, taxation and finance roles in the banking and financial services industry but generally to all individuals with a keen interest in understanding tax risk in transactions. It’s aimed to enhance participants’ knowledge and understanding of the taxation peculiarities of banking and financial services and the transaction tax risk mitigation strategies applicable.
Participants will get to appreciate the taxation peculiarities and complexities applicable to the banker-customer relationship and tax risk that arises as a result of this special relationship. We will be discussing at length the pitfalls and tax risk apparent in the various transactions including international money transfers, mortgages and securities, finance leases among others and how it arises as well as transaction best practices to mitigate this risk.