Critical analysis of corporate tax evasion in Uganda
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Date
2017-08
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Publisher
Kampala International University; School of Law
Abstract
This Dissertation was intended to critically analyze corporate tax evasion in Uganda: It was guided by the specific objectives which included finding out whether Uganda's legal 1•egime provides for corporate tax evasion, depict the role of Uganda Revenue Authority in ensuring corporate tax compliance, explore the international legal regime in regards to corporate tax evasion and to suggest or make improvements to the law in regard to corporate tax evasion. Uganda presents an intriguing case of tax avoidance. A wide range of experts agree that the nature of Uganda's tax system conforms to global benchmarks. Income and corporate tax rates in Uganda are 30 per cent per annum at the highest bracket. The large gap between actual tax paid on overall earnings and expected tax to be paid on income-generating activities is worrying. This also highlights the extent of tax evasion and tax avoidance prevalent. Noteworthy is tax evasion, which is failing to file a tax return and pay taxes when they are due is illegal. If found guilty, action can be taken against the individual or organisation involved. Ironically, those engaged in tax avoidance, which involves exploiting loopholes in the law to circumvent paying some tax escape penalty, as it is not deemed to be against the law. Tax avoidance does not just occur due to those who intentionally elude paying tax. Informal sectors not captured by the tax regime alongside ignorance about tax matters contribute significantly to tax evasion. To minimize this, there are three things the government ought to do: Improve the legal framework to weed out possibilities of tax avoidance, create better incentives for tax payment and promote persuasive and far-reaching tax awareness. The study recommends there to be intensive computerization of the system to easily monitor and curb any manipulation of the tax audits. There is need for readily available knowledge on tax evasion and tax avoidance in Uganda given that data and literature in this respect is scarce, such to enable the respective authorities to tackle problems. Reforming tax policies and strengthening tax administrations in Uganda is crucial to establish a 'level playing field' in tax matters between other countries' administrations, globally active MNEs and large and well informed taxpayers. In this regard, specialized training's in the field of cross-border profit shifting and tax fraud represent a promising strategy for future work.
Description
A dissertation presented to the School of Law in partial fulfillment of the requirements for the Award of a Bachelor's Degree of Laws of Kampala International University
Keywords
Critical analysis, Corporate tax evasion, Uganda