Question: What are the best tax planning strategies for businesses in Uganda?
Answer: Tax planning is a broad term that is used to describe the processes utilized by businesses to pay the taxes due to a revenue collection authority.
The process includes elements such as: • Managing tax implications, • Understanding what type of expenses are tax deductible under current regulations, • Planning for taxes in a manner that ensures the amount of tax due will be paid in a timely manner.
For several businesses, the primary goal of tax planning is to apply current laws in a manner that allows the business to reduce the amount of taxable income for the period. Thus, planning for taxes involves knowing which types of income currently qualify for as exempt from taxation.
The process also involves understanding what types of expenses may be legitimately considered as deductions, and what circumstances have to exist in order for the deduction to be claimed on the tax return.
It is therefore advisable for any one undertaking any strategy in tax planning to ensure that they understand the current laws in the country. This is mainly to ensure that you can play around it and avoid tax (this is legal) rather than evade (which is illegal).
For cases where one is not conversant with the law and taxation it is advisable to seek consultancy services from Tax accountants.