Dissatisfied with the URA tax assessment?

“Death, taxes and childbirth! There's never any convenient time for any of them.” ― Margaret Mitchell,

Are you eligible to file the returns?

If you are employed and you also have a business or rentals, or if you are purely a business owner or are self-employed, you are required to file your individual tax returns for yourself and or a non-individual tax return for your business. If you are an individual, you are required to have furnished URA with your provisional return for the year of income 1st July 2014 to 30th June 2015. If you haven’t, then you will receive a letter like the one below (refer to Sample Income Tax Notice for Assessment).

Dissatisfied with the URA tax assessment?

Many people fret when they receive such a notice of assessment especially when URA asses you for ridiculous amounts of tax payable. The good news is in the last paragraph of the letter which advises you on what to do 'If you are dissatisfied with this administrative estimated assessment'. However, to be able to make reasonable estimates, you need to have a reliable basis of making the estimate. This comes back to the basics, in order to get accurate and timely information about your business, you need to have proper books of accounts.

"Sample Income Tax Notice for Assessment:

Due to failure to furnish your estimate of gross turnover or chargeable income as required by Section 111(2) or (3) of the Income Tax Act (as amended) Cap 340, URA hereby informs you that an Administrative Provisional Estimated Assessment has been issued to you under Sec 112(6) with the following details;

Tax type: Income Tax

Tax Period: 201X-201X

URA Compliance Office: KAMPALA CENTRAL

Tax Payable (Including penalty) : XXX

Due date of payment: XX/XX/XXXX

Please make payment to any designated bank of your choice by the due date indicated in the attached assessment. Note: Failure to pay the total amount by the due date shall attract interest at a rate of 2% per month on any outstanding amount. Cheques or electronic funds transfer should be made to "UGANDA REVENUE AUTHORITY".

If you are dissatisfied with this administrative estimated assessment, you are advised to submit your estimate of gross turnover or chargeable income for the year of income before the end of the tax period above; otherwise this assessment shall remain in force. We assure you of our best services. URA"

Do you have what is needed in order to file the returns?

To file your final returns for the tax period 2013-2014, you will need an Income and Expenditure statement (Statement of Comprehensive Income) and a Balance Sheet (Statement of Financial Position) for the period 2013-2014. To file your provisional returns for the tax period 2014-2015, you will need your chargeable income projections for the period 2014-2015 (for the individuals), or an estimated Income and Expenditure Statement for the period 2014-2015 (for the non-individual).

Are you a presumptive Tax Payer?
If you are a presumptive tax payer “small business persons”(with annual gross turnover of less than shs.50M) annual turnover, you need your turnover figures only. The tax computed on the basis of GROSS TURNOVER is a final tax on the taxpayer’s business income. Also note that no deductions are allowed in respect of any expenditure or losses incurred.

Not included in this category of taxpayers even when the turnover is less than 50 million shillings are persons carrying on the following businesses:

(a) Medical practice

(b)Dental practice

(c) Architectural service

(d) Engineering service

(e) Accounting practice

(f) Legal practice

(g) Any other professional service

(h) Public entertainment service

(i) Public utility service

(j) Construction service

NOTE: Persons falling under the above listed business categories OR whose gross turnover is above FIFTY MILLION shillings in a year are required by law to file final and provisional income tax returns and be assessed to tax the normal way which is based on net income for the year and progressive rates of tax.

Have you filed both your provisional and final income tax returns?

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