By Silvia Nyambura
Tax Body Uganda Revenue Authority (URA) is set to review its records to deregister businesses with a Value Added Tax (VAT) threshold below Ushs 150 million. The said businesses will be notified within the course of this week. This follows the tax policy changes announced by the Minister for Finance Matia Kasaija while reading the 2015/2016 budget last week.
According to Henry Saka the commissioner for domestic taxes at URA, VAT threshold has been static since its introduction in 1996. Over the years, the value of the shilling has changed 3 fold meaning the review was timely.
Speaking at the URA post Budget analysis seminar held at the Imperial Royal Hotel in Kampala today, Saka said, “This move aims at reducing the cost of compliance to the tax payers, minimizing the cost of administration and harmonizing with other players in the region.”
In addition, Saka explained new changes in tax policy also mean licensees in the mining and petroleum sector and commercial farmers may register for VAT.
URA’s strategy this financial year according to the Commissioner General Doris Akol is to pay close attention to the Small and Medium Enterprises (SMEs).
“SMEs create employment for over 2.5 million Ugandans. We aim at providing information and education to help such organizations in their compliance efforts. We cannot overlook SMEs and their role in increasing tax output as well as their contribution to the economy. This inaugural seminar therefore focuses significantly on the informal sector and aims at changing their mind sets,” she said.
Also making his remarks during the event, Herman Kasekende the CEO Standard Chartered Bank concurred SMEs need to formalize their businesses. This according to him will ensure they have easier access to finance.
“There are numerous emerging opportunities for the informal sector in various sectors involved in the development of the economy. Being tax registered will ensure they are credible enough to participate in national content,” he explained.
