Uganda: Tax And Legal At The Heart Of Business Sustainability

Last Updated: 3 October 2019
Article by Steven K. Mugisha

A panic attack swamped my family when I made age 20. The surviving old-folks demanded and pressed for their grandsons from all the young men in my age range. They said they were concerned about the "Karegyesa dynasty" originally from Butare. The folks and their ancestors had predetermined continuity through the boy child. (These beliefs are changing though).

I also know of several powerful kingdoms within the region that have sighed in relief when certain boys were born. These kingdoms' continuity had for decades been perceived to be threatened because they had not yet gotten children meeting certain qualifications

The concern in both was one thing; sustainability. Just like dynasties that have predetermined credentials for assured continuity, there are certain things that must happen in a certain way in order to see business entity sustainability into the future and sometimes into perpetuity

Several scholars on organizational financial sustainability have emphasized certain pillars for business continuity; Strategic Financial Planning, Income Generation, Diversification and Sensible Internal Control. They suggest that if a company focuses and gets those four right then it will be sustainable in the foreseeable future

I seem to agree with the good scholars but not entirely. For taxation to be seated within the Strategic Financial Planning Pillar is to deny it the ever increasing prominence and sensitivity it should exhibit. One of the gravest mistakes that our businesses commit is to regard taxation as one and the same with accounting and finance. Of course this is not true as accounting profits have got to be adjusted to come up to a taxable number. Making these adjustments may not be easy for someone whose focus is the routine work within the finance department

Tax legislation is also so dynamic, for example consistent loss makers may commence paying income tax after a certain number of years according to new proposals. Speaking into the VAT space, there are items that used to be zero rated some years back but are now exempt or taxed at a standard rate. The withholding tax rates are different in different circumstances and in different years. What is allowable to relieve profits from tax is also not static and no longer straight forward; let us look at the regulations coming up in the new financial year relating to borrowing costs where only certain amounts in certain circumstances will be allowable. It is clear somebody has got to keep an eye on all these changes

Anyone who has seen the recent tax proposals that I think will soon become law will agree that entities are becoming more responsible for persons they are paying, for instance the proposed requirements placed on entities to withhold 50% of VAT on the face of an invoice that meets certain criteria mean that the companies must also ensure that their suppliers comply and are registered when they need to. Since this VAT will also have a withholding tax hat, someone must ensure compliance with both VAT and withholding tax requirements

There are a number of organizations that have shut down simply because they did not regard taxation as an important pillar of their businesses; some even if were NGOs carrying-out exempt activities, they had not obtained definite exemption as required and some were not aware of their obligations to file annual income tax returns despite the exemption. Some organizations had unknowingly exceeded the VAT registration threshold and continued to do business as usual without collecting VAT on sales. There are cases where huge amounts in capital gains tax had not been considered at the point when assets were being disposed of. Most of these were cases of ignorance that resulted into tax liabilities in billions of shillings that led to a shut down

Despite enacting regulations, most of our people continue to regard Transfer Pricing as a foreign thing and only a preserve for large multinationals. I think most of our medium and large enterprises have and deal with associated entities. There are a lot of documentation requirements to prove that the pricing when dealing with associates would be the same had the transaction occurred with outsiders. The process of comparison and benchmarking to come up with a transfer pricing report and all the necessary documentation as required, needs technical competence that may not readily be available within the business entity. This area is also evolving, for example recent guidelines require compilation of a country by country report

I strongly feel that today's organisation needs to start entertaining the idea of having a tax department not as a "by-the-way" within the finance department or explore outsourcing the function to competent tax practitioners. The call is for the business but one thing is for sure, taxation has got to be given much more extra attention from now on.

I would want us to conclude today's discussion by agreeing that we amend the previous scholars' sustainability model to include a 5th Pillar; Tax and Legal.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

To print this article, all you need is to be registered on

Click to Login as an existing user or Register so you can print this article.

In association with
Related Topics
Related Articles
Up-coming Events Search
Font Size:
Mondaq on Twitter
Mondaq Free Registration
Gain access to Mondaq global archive of over 375,000 articles covering 200 countries with a personalised News Alert and automatic login on this device.
Mondaq News Alert (some suggested topics and region)
Select Topics
Registration (please scroll down to set your data preferences)

Mondaq Ltd requires you to register and provide information that personally identifies you, including your content preferences, for three primary purposes (full details of Mondaq’s use of your personal data can be found in our Privacy and Cookies Notice):

  • To allow you to personalize the Mondaq websites you are visiting to show content ("Content") relevant to your interests.
  • To enable features such as password reminder, news alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our content providers ("Contributors") who contribute Content for free for your use.

Mondaq hopes that our registered users will support us in maintaining our free to view business model by consenting to our use of your personal data as described below.

Mondaq has a "free to view" business model. Our services are paid for by Contributors in exchange for Mondaq providing them with access to information about who accesses their content. Once personal data is transferred to our Contributors they become a data controller of this personal data. They use it to measure the response that their articles are receiving, as a form of market research. They may also use it to provide Mondaq users with information about their products and services.

Details of each Contributor to which your personal data will be transferred is clearly stated within the Content that you access. For full details of how this Contributor will use your personal data, you should review the Contributor’s own Privacy Notice.

Please indicate your preference below:

Yes, I am happy to support Mondaq in maintaining its free to view business model by agreeing to allow Mondaq to share my personal data with Contributors whose Content I access
No, I do not want Mondaq to share my personal data with Contributors

Also please let us know whether you are happy to receive communications promoting products and services offered by Mondaq:

Yes, I am happy to received promotional communications from Mondaq
No, please do not send me promotional communications from Mondaq
Terms & Conditions (the Website) is owned and managed by Mondaq Ltd (Mondaq). Mondaq grants you a non-exclusive, revocable licence to access the Website and associated services, such as the Mondaq News Alerts (Services), subject to and in consideration of your compliance with the following terms and conditions of use (Terms). Your use of the Website and/or Services constitutes your agreement to the Terms. Mondaq may terminate your use of the Website and Services if you are in breach of these Terms or if Mondaq decides to terminate the licence granted hereunder for any reason whatsoever.

Use of

To Use you must be: eighteen (18) years old or over; legally capable of entering into binding contracts; and not in any way prohibited by the applicable law to enter into these Terms in the jurisdiction which you are currently located.

You may use the Website as an unregistered user, however, you are required to register as a user if you wish to read the full text of the Content or to receive the Services.

You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these Terms or with the prior written consent of Mondaq. You may not use electronic or other means to extract details or information from the Content. Nor shall you extract information about users or Contributors in order to offer them any services or products.

In your use of the Website and/or Services you shall: comply with all applicable laws, regulations, directives and legislations which apply to your Use of the Website and/or Services in whatever country you are physically located including without limitation any and all consumer law, export control laws and regulations; provide to us true, correct and accurate information and promptly inform us in the event that any information that you have provided to us changes or becomes inaccurate; notify Mondaq immediately of any circumstances where you have reason to believe that any Intellectual Property Rights or any other rights of any third party may have been infringed; co-operate with reasonable security or other checks or requests for information made by Mondaq from time to time; and at all times be fully liable for the breach of any of these Terms by a third party using your login details to access the Website and/or Services

however, you shall not: do anything likely to impair, interfere with or damage or cause harm or distress to any persons, or the network; do anything that will infringe any Intellectual Property Rights or other rights of Mondaq or any third party; or use the Website, Services and/or Content otherwise than in accordance with these Terms; use any trade marks or service marks of Mondaq or the Contributors, or do anything which may be seen to take unfair advantage of the reputation and goodwill of Mondaq or the Contributors, or the Website, Services and/or Content.

Mondaq reserves the right, in its sole discretion, to take any action that it deems necessary and appropriate in the event it considers that there is a breach or threatened breach of the Terms.

Mondaq’s Rights and Obligations

Unless otherwise expressly set out to the contrary, nothing in these Terms shall serve to transfer from Mondaq to you, any Intellectual Property Rights owned by and/or licensed to Mondaq and all rights, title and interest in and to such Intellectual Property Rights will remain exclusively with Mondaq and/or its licensors.

Mondaq shall use its reasonable endeavours to make the Website and Services available to you at all times, but we cannot guarantee an uninterrupted and fault free service.

Mondaq reserves the right to make changes to the services and/or the Website or part thereof, from time to time, and we may add, remove, modify and/or vary any elements of features and functionalities of the Website or the services.

Mondaq also reserves the right from time to time to monitor your Use of the Website and/or services.


The Content is general information only. It is not intended to constitute legal advice or seek to be the complete and comprehensive statement of the law, nor is it intended to address your specific requirements or provide advice on which reliance should be placed. Mondaq and/or its Contributors and other suppliers make no representations about the suitability of the information contained in the Content for any purpose. All Content provided "as is" without warranty of any kind. Mondaq and/or its Contributors and other suppliers hereby exclude and disclaim all representations, warranties or guarantees with regard to the Content, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. To the maximum extent permitted by law, Mondaq expressly excludes all representations, warranties, obligations, and liabilities arising out of or in connection with all Content. In no event shall Mondaq and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use of the Content or performance of Mondaq’s Services.


Mondaq may alter or amend these Terms by amending them on the Website. By continuing to Use the Services and/or the Website after such amendment, you will be deemed to have accepted any amendment to these Terms.

These Terms shall be governed by and construed in accordance with the laws of England and Wales and you irrevocably submit to the exclusive jurisdiction of the courts of England and Wales to settle any dispute which may arise out of or in connection with these Terms. If you live outside the United Kingdom, English law shall apply only to the extent that English law shall not deprive you of any legal protection accorded in accordance with the law of the place where you are habitually resident ("Local Law"). In the event English law deprives you of any legal protection which is accorded to you under Local Law, then these terms shall be governed by Local Law and any dispute or claim arising out of or in connection with these Terms shall be subject to the non-exclusive jurisdiction of the courts where you are habitually resident.

You may print and keep a copy of these Terms, which form the entire agreement between you and Mondaq and supersede any other communications or advertising in respect of the Service and/or the Website.

No delay in exercising or non-exercise by you and/or Mondaq of any of its rights under or in connection with these Terms shall operate as a waiver or release of each of your or Mondaq’s right. Rather, any such waiver or release must be specifically granted in writing signed by the party granting it.

If any part of these Terms is held unenforceable, that part shall be enforced to the maximum extent permissible so as to give effect to the intent of the parties, and the Terms shall continue in full force and effect.

Mondaq shall not incur any liability to you on account of any loss or damage resulting from any delay or failure to perform all or any part of these Terms if such delay or failure is caused, in whole or in part, by events, occurrences, or causes beyond the control of Mondaq. Such events, occurrences or causes will include, without limitation, acts of God, strikes, lockouts, server and network failure, riots, acts of war, earthquakes, fire and explosions.

By clicking Register you state you have read and agree to our Terms and Conditions