7 Common Tax Mistakes Ugandan Businesses Make—And How to Avoid Them
Introduction
Running a business in Uganda comes with its fair share of challenges—from fluctuating markets to hiring qualified staff. However, one area that consistently causes trouble is taxation. Failure to comply with Uganda Revenue Authority (URA) regulations can cost your business a fortune. In this article, we break down 7 common tax mistakes and how you can avoid them for good.
1. Late Filing of Returns
Many businesses wait until the last minute to file their returns, only to miss deadlines and incur penalties. URA has strict timelines for filing VAT, PAYE, and Income Tax. Staying ahead of these deadlines is crucial to avoiding extra costs and protecting your reputation.
Solution: Set up monthly reminders or outsource to a firm like MaryHill to handle it for you.
2. Incorrect PAYE Calculations
Misclassifying employees or misapplying PAYE tax brackets often leads to underpayments. This results in URA penalties and backdated interest.
Solution: Always update your payroll system and consult with tax professionals for accurate figures.
3. Ignoring Withholding Tax Obligations
Paying suppliers or consultants without deducting withholding tax (WHT) is a major error. URA may audit and penalize your company for the unpaid portion.
Solution: Deduct WHT as required and file the appropriate returns monthly.
4. Failure to File Nil Returns
Just because you didn’t make sales doesn’t mean you’re off the hook. URA still expects a return—even if it’s nil.
Solution: Always submit monthly returns, even when there’s no income.
5. Using Unverified Tax Agents
Some businesses hire unqualified individuals who promise quick fixes. These shortcuts often lead to more trouble later, especially when audited.
Solution: Work with certified tax professionals like MaryHill who understand Uganda’s tax landscape.
6. No Record-Keeping System
Failing to keep proper invoices, receipts, and statements makes audits a nightmare and affects the accuracy of your filings.
Solution: Implement digital accounting tools or hire a bookkeeping service.
7. Misunderstanding Tax Categories
Some businesses wrongly register for VAT or miss out on tax incentives because they don’t understand the available tax categories.
Solution: Let experts guide you during registration and review your tax strategy annually.
Conclusion
Avoiding these mistakes doesn’t just save money—it gives you peace of mind. At MaryHill Tax Services, we help businesses stay compliant, efficient, and audit-ready
