Filing of Tax Returns

This is a process where a taxpayer reports accurately, correctly and in completeness all tax obligations  according to the tax laws to Uganda Revenue Authority in a prescribed format within a specified period.

Please Note:

The following are persons who are not expected to file tax returns;

• A non-resident whose income is derived from sources within Uganda and is subjected to withholding tax as a final tax e.g. International payments or payments to non-resident public entertainers, sports persons, contractors or professionals.
• A resident individual whose gross income consists exclusively of employment income derived from a single employer and from which tax has been withheld under the PAYE system.
• A resident individual whose total chargeable income for the year of income is below the stated threshold in the income tax Act.

Why do you need to submit a Tax Return

Return Due Dates

 Return period and due date for filing return for various sub tax types in income tax are listed below.

​Keeping Business Records

What are Business Records?

A business  record  is a  documentation of the  transactions   that  a business carries out in a given period. This documentation is normally in the traditional form of records written down on paper; it may also be electronically kept on say a computer, or both.

Records include but are not limited to accounting and other financial documents kept in an organized way.

You  are required  to  maintain  adequate records  if you are carrying on  a business  or engaged in a commercial  activity. These records must provide sufficient details to determine your tax obligations and entitlements. They have  to  be  supported by source  documents to verify the information in the records.

What kind of records do I have to keep?

A business  has  to  keep  records  relating  to  all its transactions, it is important to  always have  records  that  are  dated, so that  you  can understand which records relate to what period.

Types of records one should keep include:

• Income statement (List of Receipts and Payments).
• Balance sheet.
• Payroll.
• Import schedules.
• Contracts.
• Bank  statements
• Appointment  Letters
• Bills (e.g. Utility  Bills).
• Stock records.
• List of Assets (Assets Register).
• Many other records and/or documents relevant to your business such as Receipt-books, Invoices, Debtors and Creditors should be kept.

Some detailed illustration of records you should keep:

(a) Income Records

 Keep track of the gross income your business earns.

Gross income is your total income before you deduct the cost of goods sold and expenses.

Your income records should show:

• The date
• Amount
• Source of the income

Record the income whether you received cash, property, or services. Support   all  income   entries   with   original   documents.   Original documents include:

• Sales invoices
• Cash register tapes
• Receipts
• Fee statements
• Contracts, and so on

 (b) Expense Records

Always get receipts  or other  vouchers  when you buy something for your business.

The receipts have to show:

• The date of the purchase
• The name and address of the seller or supplier
• The name and address of the buyer
• A full description of the goods or services

Sometimes, however, suppliers may not provide receipts. In this case, write the information in your records. Show the name and address of the supplier, the date  you made  the payment, the amount  you paid, and the details of the transaction.

Make sure  the  seller  describes  the  item  on  the  receipt.  However, sometimes  there  is no  description  on  the  receipt. In this case, you should write what the item is on the receipt or in your expense journal.

How often can I keep records?

An accurate  record  of every transaction  must  be made  whenever  a business transaction occurs. It is recommended that documentation of such transactions  is made immediately they take place, this eases the work and enhances accuracy and also avoids omissions that may occur as a result of forgetting certain items due to passage of time.

Why is it important to keep records?

The importance of Record Keeping cannot  be overemphasized, the benefits are limitless.

Here are some benefits of keeping complete and organized records:

1. Keeping good  records  will remind you  of expenses  you  can  deduct when it is time to do your income tax return.
2. When you earn income from many places,   good    records   help   you to  identify  the  source  of income. Unless proper records are kept, you may not be able to prove that some income is not from your business, or that it is not taxable.
3. Good records  will keep you better informed  about  the  past  and present   financial  position  of your business.
4. Good records can help you budget, spot trends  in your business, and assist to get help from banks and other lenders.
5. Good records can prevent  problems  you may run into if we audit your income tax returns.

An example of how you can benefit by keeping proper records;

Keep a record  of the  properties  you bought and  sold. This record should show who sold you the property, the cost, and the date at which you bought it. This information will help you calculate your claim for initial allowances, capital deduction allowance and other amounts.

If you sell or trade a property, show the date you sold or traded it and the amount of the payment or credit from the sale or trade in your record books

Keep a record of your daily income and expenses. URA does not issue record books or suggest  any type of book or set of books. There are many record books and book keeping systems available.

For example, you can use a book that has columns and separate pages for income and expenses.

Keep  your  records, along  with  your  duplicate deposit  slips, bank statements, and  cancelled  cheques. Keep separate  records  for each business you operate.

If you want to keep computerized records, make sure they are clear and easy to read.

Please Note:

 If you do not keep the necessary information and you do not have

any other proof, URA may have to determine your income using other methods. We may also reduce the expenses you deducted.

Legal requirements – records and information collection

Part IV of the Income Tax Act (Cap.340) imposes certain obligations and duties upon anyone carrying on business in Uganda. Hereunder are some of the sections of the act that spell out these requirements.

Accounts and Records (S129):

1. Unless otherwise  authorized  by the  Commissioner, a taxpayer shall maintain  in Uganda such records as may be necessary to explain  the  information  provided  in a return  or in any other document furnished  in terms  of section  92 or to  enable  an accurate determination of the tax payable by the taxpayer.
2. The commissioner  may disallow a claim for a deduction if the taxpayer  is unable  without  reasonable excuse  to  produce   a receipt or other record of the transaction or to produce evidence relating  to  the  circumstances  giving rise to  the  claim for the deduction.
3. The record or evidence referred to in this section shall be retained for five years after the end of the year of income to which the record or evidence relates.

Books and Records not in English Language (S 133);

Where any book, record or computer stored information referred to in Sections 129,131 or 132 are not in English, the Commissioner may, by notice in writing, require the person keeping the book, record or computer stored information to provide, at the person’s expense, a translation into English by a translator approved  by the Commissioner.

Failure to maintain Proper Records (S 139)

A person who fails to maintain proper records under this Act commits an offence and is liable on conviction to:

1. Where the  failure was deliberate, a fine not  less than  fifteen currency points  or to imprisonment for a term  not  exceeding one year, or
2. In any other  case, a fine  not  exceeding  twenty-five  currency points.

Penal Tax in relation to Records

Record keeping is a legal requirement imposed on any person carrying on business  in Uganda.

The Income Tax Act 1997 Section 152 spells that ‘A person who deliberately fails to maintain proper  records for a year in accordance  with the requirements of this Act is liable to pay a penal tax equal to double the amount of tax payable by the person for that year’.