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Private sector asks govt to extend tax payment holiday
The private sector says there is need to conduct a study to ascertain who can and who cannot pay taxes for now. PHOTO/FILE
What you need to know:
- According to data provide in the Budget Speech government had deferred at least Shs249.73b in a number of tax measures that sought to enable businesses have enough operational capital.
- But the amount is due for repayment after the expiry of the deferment window last month.
- Those expected to resume payment include tax payers of Corporate Incomes Tax, Presumptive Tax and Pay as You Earn.
The private sector has asked government to conduct a survey before it can ask businesses to resume paying taxes.
Government had in April offered tax deferral in which businesses had been provided a window to carry forward tax payment for at least three months.
However, according to available details, the window expired last month and businesses are expected to start filing returns on or before October 15.
Speaking in an interview yesterday, Mr Gideon Badagawa, the Private Sector Foundation Uganda executive director, told Daily Monitor government must ascertain the performance of the private sector since June before assuming that the private sector was now ready to resume tax payment.
“The deferral was for three months. Is the private sector now ready to start paying the taxes? We need to put a thermometer [sic] and measure. We simply cannot say because we set a date, therefore, we must resume,” he said, noting there are many undercurrents that may have prevented the private sector from performing and building capacity to pay taxes.
Government had in the 2020/21 Budget Speech indicated that in order to address short term emergency liquidity requirements, it had been forced to put in place tax relief measures, among which included deferment of payment of Corporate Income Tax or Presumptive Tax until September 2020.
The government also dropped interest or penalties on taxes accumulated during the period for a number of businesses, among which included those in tourism, manufacturing, horticulture and floriculture.
At least 10,140 businesses representing a deferment of Shs12.5b in Corporate Incomes Tax, had been projected to benefit at the time while 23,892 businesses, which represented Shs1.38b for Presumptive Tax would be allowed to carry forward the payment.
Yesterday, Mr Badagawa wondered how government expects businesses, especially in the tourism sector and transport such as airlines, among others, which continue to be under lockdown or have just resumed business, are expected to pay taxes with incomes.
“Look at the tourism sector. Have players in the last three months made enough money to pay taxes? The reason why government deferred [payment of taxes] was that many business were making losses.
So how ready are they to start paying taxes?” he wondered, noting that it was important that businesses file tax returns so that they can be able to show government that they are not making money.
“Government might be thinking that these businesses are making money but they are hiding away from paying taxes,” Mr Badagawa said.
In April, government had also deferred payment of Pay As You Earn to a projected to Shs65.35b and waived interest on tax arrears, which would provide relief of about Shs50b.
Other measures included provision of Tax Deductibility of donations for the Coronavirus response as well as expediting payment of outstanding value-added tax refunds of Shs120.53b.
Mr Vincent Seruma, the Uganda Revenue Authority head of public and corporate affairs, said yesterday taxpayers should be able to pay but there will be a leeway for those that are not yet ready.
“In the event that the company is not able to fulfil its obligation, they should indicate so in writing and will be considered for a payment plan on a case-by-case basis,” he said.
