Sometimes firms do not prioritize the impact of tax risk for clients until assessments and associated penalties come in. At Dativa & Associates, in-house trainings are emphasized and regularly conducted to equip staff with the required knowledge to assist clients file accurate tax returns promptly and curb resultant costs associates.
Some of the lessons learnt in a recent training was a case where an Organisation would inadvertently reflect its incomes from sub-leased premises as rental income while filing Income Tax returns yet the Organisation does not deal in rental Business. This would attract a tax charge separately even when the Organisation is incurring losses. Such an Organisation would be advised to include such incomes under other incomes of the Business. If not, it would face higher tax cost due to wrong classification of Incomes.
“Non-compliance to tax regulations calls for fines and penalties. This is a cost to the Organisation that could be avoided. Income Tax returns should always be filed by the end of six months after the financial year in which the return relates to. For PAYE, VAT and Withholding tax return filing should be done by 15th of the following month. Companies should always file returns promptly to avoid penalties of late filling.”
With technology advancement from which many Organisations are taking advantage, the transactional costs that used to be incurred while paying taxes have generally been reduced. Return forms can always be downloaded from the URA portal and payments made to the Banks electronically. This is so convenient and time saving contrary to the traditional ways of tax collection.
However, such knowledge on compliance with the tax regulations to curb the tax risks require training on the application of the URA web portal to easily navigate through it. The fact that the URA portal has detailed functionality, one needs to go through a hands-on training to be able to file returns as required. A point to note, accurate information should be fed into the form and when filing returns, avoid cut and paste tendency, otherwise, the system won’t upload the form. In short, one shouldn’t advise clients oblivious of the tax issues. Thus, extensive training is a vital tool to keep staff dated and equipping them with appropriate answers to clients’ teething queries. At the end of it all, “Knowledge is Power.”
By LUKE NIMUSIIMA