Reduce tax on used goods, say accountants
Oct 14, 2004
ACCOUNTANTS have proposed a reduction in Value Added Tax (VAT) on second-hand goods, arguing that it will minimise under-declaration of goods and tax evasion.
By Sylvia Juuko
ACCOUNTANTS have proposed a reduction in Value Added Tax (VAT) on second-hand goods, arguing that it will minimise under-declaration of goods and tax evasion.
Ernst & Young’s tax manager, Muhammad Ssempijja said the law should be amended to ensure that the 17% VAT on second-hand goods like cars and furniture is payable after profits.
“A second-hand goods scheme should be instituted with special provisions. Traders of second-hand goods do not usually get tax invoices from the suppliers since there is no organised market for these items and the suppliers are not registered for VAT. Therefore, tax payers lose out by paying full output tax on their sales without offsetting input tax,†Ssempijja said.
He was discussing the Institute of Public Certified Accountants of Uganda’s tax proposals for the 2005/06 national budget to the finance ministry at the Grand Imperial Hotel, Kampala on Wednesday.
He said the time for filing objections to assessments of the VAT Statute should be increased from 30 to 45 days to cater for postal delays among others.
The accountants recommended for the reduction of the 15% Withholding Tax on dividends to 5% in line with Kenya and Tanzania.
“This will encourage investments and distribution of profits. It will also accelerate growth of capital markets,†read the proposals.
Ssempijja said the threshold on Income Tax should be increased.
ACCOUNTANTS have proposed a reduction in Value Added Tax (VAT) on second-hand goods, arguing that it will minimise under-declaration of goods and tax evasion.
Ernst & Young’s tax manager, Muhammad Ssempijja said the law should be amended to ensure that the 17% VAT on second-hand goods like cars and furniture is payable after profits.
“A second-hand goods scheme should be instituted with special provisions. Traders of second-hand goods do not usually get tax invoices from the suppliers since there is no organised market for these items and the suppliers are not registered for VAT. Therefore, tax payers lose out by paying full output tax on their sales without offsetting input tax,†Ssempijja said.
He was discussing the Institute of Public Certified Accountants of Uganda’s tax proposals for the 2005/06 national budget to the finance ministry at the Grand Imperial Hotel, Kampala on Wednesday.
He said the time for filing objections to assessments of the VAT Statute should be increased from 30 to 45 days to cater for postal delays among others.
The accountants recommended for the reduction of the 15% Withholding Tax on dividends to 5% in line with Kenya and Tanzania.
“This will encourage investments and distribution of profits. It will also accelerate growth of capital markets,†read the proposals.
Ssempijja said the threshold on Income Tax should be increased.