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Uganda Revenue Authority Issues Public Notices on Voluntary Disclosure and Compliance Focus — Orbitax Tax News & Alerts

The Uganda Revenue Authority (URA) has issued public notices regarding voluntary disclosure and compliance issues that will be given focus for review in financial year 2020/2021.

The public notice on voluntary disclosure provides that pursuant to Section 66 (1a) of the Tax Procedures Code Act, 2014 as amended, a taxpayer who voluntarily discloses any tax that should have been declared to the Commissioner, may enter into an agreement with the Commissioner to pay the outstanding unpaid tax and that person shall not be required to pay any interest or fine due. Such voluntary disclosure occurs where a taxpayer voluntarily discloses what ought to have been disclosed but was not declared or partially declared before being prompted by any action or threat of action by the URA, including:

  • tax investigation:
  • request for tax information
  • tax advisory
  • tax health check/review
  • notice for tax audit
  • tax query; or
  • compliance visit by URA Officers.

The public notice further highlights that the provision for voluntary disclosure will not apply once a non-disclosure is discovered through the intensive tax compliance activities that the URA plans to soon undertake.

To obtain the benefits of voluntary disclosure, the disclosure must be made in writing and include a complete and accurate highlighting of any previous inaccuracies or incomplete or non-disclosure of tax. This must be duly signed and accompanied by relevant documentation, such as evidence relating to the omission and proof of payment of the principal tax relating to the disclosure.

The public notice on compliance issues provides that the URA will be giving focus to the following issues (risks) in financial year 2020/2021:

  • Issuance and purchase of fictitious invoices;
  • Misrepresentation of the loan portfolio;
  • Misrepresentation of overseas entities in domestic transactions;
  • Misrepresentation of employee benefits;
  • Abuse of the Tax Identification Number (TIN);
  • Misclassification and undervaluation of imports;
  • Importers not up-to-date with domestic tax obligations;
  • Inflation of expenses;
  • Perpetual late filers;
  • Suppression of gross profit margin;
  • Under declaration of rental income;
  • Mismatch between sales and WHT declarations;
  • Mismatch between sales and export value;
  • Mismatch between sales declared for VAT and Income Tax purposes;
  • Mismatch between payments from third parties (including Government) and declared income;
  • Frequent importers with the only declared source of income as employment;
  • Importers liable for VAT registration and still not VAT registered; and
  • Persons earning taxable income and not registered for tax.

The public notice encourages taxpayers to review their tax declarations and ensure that none of the above compliance issues or other issues are present. It is also noted that compliance will be considered when determining a taxpayer's suitability for certain facilities such as withholding tax exemption, tax clearance certificates, and customs clearance, among others.