Hi. Very useful conversation. While we should support the effort to deal with companies that endlessly report losses, how do we deal with companies that have losses as a result of investment allowances? As an alternative, may be government should introduce an advance tax (similar to the one paid for commercial vehicles) for the informal sector, payable when renewing the license. Most restaurants, kiosks, salons, kinyozi, garage, spares shop, neighbourhood wines and spirits etc have a business license but very few pay any tax. How much would KRA collect if such an advance tax was introduced?

The taxation rule is clear: taxable income minus tax deductible expenses. A business with a high value product and low margin will end up paying taxes that cannot be recovered: Going by experience of Without VAT where companies ended in big receivables leading to strain on working capital, this tax makes no sense

With Idf and Rdl and the minimum tax makes us atleast 5% more expensive than Uganda in doing business.

What is defined as turnover?

Does this apply to banks ?

This tax will cut out middlemen and the multiplier effect of the tax will increase inflation. If I as a manufacturer operate in a 5 tier value added system, so I buy from 2 tiers of suppliers, could be someone who gets the raw material, sells it to a processor, who then sell me an intermediary product, then I process it, sell it to a distributor who then sells it to a retailer, then the effect of this tax is 5x. See below:Raw Material Retriever Kshs 10,000,000 @ 1% = Kshs 100,000Raw Material Processor Kshs 15,000,000 @ 1% = Kshs 150,000Manufacturer Kshs 25,000,000 @ 1% = Kshs 250,000Distributor Kshs 30,000,000 @ 1% = Kshs 300,000Retailer Kshs 40,000,000 @ 1% = Kshs 400,000So Retail Price is 40,000,000/= and total revenue collected by KRA is Kshs 1,200,000/=. This would be 3% due to the value chain. The tax is collected multiple times!!Its unfair to manufacturers and better for importers. It would be cheaper for the distributor to be the importer and he would only pay on his 30,000,000!

Are any KRA and or Treasury guys here?

Informative discussion thank you @Muchai kunyiha kindly side chat me your email .

How do we apply for Waiver of Penalties and Interest

what will be the set dates to pay this 1% minimum tax

sorry my question wasn't clear.. i means which day of the month to pay

what are the expected compliance issues? the gross turnover seem ambiguous

Can one pay the 1% on a quarterly ?

Are we still supposed to use the 110% of prior turnover to calculate the expected instalment quartely