Tax payers are entitled to tax clearance certificates

Sir— George Mugume’s letter on Friday raised concerns about Tax Clearance Certificates. In principle, a Tax Clearance Certificate is issued by Uganda Revenue Authority (URA) only to a taxpayer who has regularly complied with the tax obligations and has fully paid all the taxes due and collectable by URA. A taxpayer is asked to complete and file correct tax returns and promptly pay any taxes due on such returns in every accounting year, depending on the taxpayer’s accounting period. For example, compliant income taxpayers who close their business books on December 31 each year (accounting date) are expected to have filed all the provisional tax returns and paid all taxes due by December 31 each year, and to file final returns within four months after the accounting date that is to say by April 30. If, therefore, a taxpayer has not defaulted on submission of tax return, and has no liabilityof any other taxes collectable by URA, like VAT, Customs Taxes and Withholding Taxes, such a taxpayer is entitled to an Annual Tax Clearance Certificate.
The issuance of Tax Clearance Certificate for each transaction was a result of the low levels of compliance by the majority of our taxpayers. There has been a remarkable improvement since.
URA is reviewing various areas in order to improve the quality of services to all our taxpayers and we intend to issue Annual Tax Clearance Certificates with effect from July 1, 2005 to taxpayers who have fully complied with all their tax obligations with Uganda Revenue Authority. A taxpayer issued with such clearance will use it for all purposes it is required, for a given year.

Allen Kagina
Commissioner General
Uganda Revenue Authority