The Tax Procedures Code Act, 2014 has sixteen parts and three schedules and provides for Registration of Tax payers, issuance of tax identification numbers and deregistration of tax payers. It also provides for record keeping where a tax payer is required to maintain their records in English and retain the records for five years after the end of the tax period.
The Tax Procedures Code Act also seeks to harmonize,consolidate and streamline tax procedures into a single law in order tosimplify tax administration and promote compliance.
The new law was passed on Tuesday evening after a lengthydebate under the chairmanship of Deputy Speaker Jacob Oulanyah.
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The Act provides that at present there are defects in theexisting law where by each domestic tax has provisions on procedural issuesposing challenges with such a structure because similar provisions arepresented differently in various Acts.
The Act has sixteen parts and three schedules and provides forRegistration of Tax payers, issuance of tax identification numbers and deregistrationof tax payers. It also provides for record keeping where a tax payer is requiredto maintain their records in English and retain the records for five yearsafter the end of the tax period. It also empowers the Uganda Revenue Authority(URA) Commissioner General to exempt a taxpayer from maintaining the record inEnglish.
Part 14 of the Act provides for for Penal tax for default infurnishing a tax return, failing to maintain proper records, making false ormisleading statements, and recovery of penal tax among others.
Under these provisions, a tax payer who defaults on furnishinga tax return by the due date is liable to a penal tax equal to 2% of the taxpayable under the return per month or 10 currency points per month. It is alsoprovided that a tax payer who deliberately fails to keep, retain or maintainany record as required under the tax law for a period is liable to penal taxequal to double of the amount of tax payable by the taxpayer for the period towhich the failure relates or to pay 50 currency points.
Part 15 of the Act provides for offences. Clause 56 providesthat a taxpayer who knowingly or recklessly does not maintain records as requiredcommits an offence and is liable on conviction to a fine not exceeding 48currency points or to imprisonment not exceeding two years or both. Clause 57provides that a person who knowingly uses a false Tax Identification Number (TIN)commits an offence and is liable on conviction to a fine not exceeding 20 currencypoints or imprisonments not exceeding one year or both.
The Act also provides that a person who uses a TIN ofanother person is treated as having used a false TIN unless the TIN has beenused by a registered tax agent with the permission of the owner. Clause 59provides that a person who obstructs a tax officer in the performance of dutiesunder a tax law commits an offence and is liable on conviction to a fine notexceeding 48 currency points or to imprisonment not exceeding two years orboth.
Finance Minister Maria Kiwanuka told MPs that the law is to empowerURA to effectively enforce taxation and generate the planned revenue. LastFinancial Year, URA registered a revenue shortfall of nearly 250 billionshillings, a loss partly blamed on tax evasion.
URA's target was to collect 4.1 trillion shillings but collected3.8 trillion shillings, registering a shortfall of about 246 billionshillings.