{UAH} Record keeping is a legal requirement

Record keeping is a legal requirement imposed on any person carrying on business in Uganda. The Income Tax Act 1997 section 152 spells that 'A person who deliberately fails to maintain proper records for a year in accordance with the requirement s of this Act is liable to pay a penal tax equal to double the amount of tax payable by the person for that year'.

A business record is a documentation of transactions that a business carries out in a given period. This documentation is normally in the traditional form of records written down on paper/book; it may also be electronically kept on a computer or both.

Records include but are not limited to accounting and other financial document kept in an organized way. These records must provide sufficient details to determine your tax obligations and entitlements. They have to be supported by source documents to verify the information in the records.

Unless otherwise authorized by the Commissioner, a tax payer shall maintain in Uganda such records as may be necessary to explain the information provided in a return or in any other document furnished in terms of section 92 (of the Income Tax Act Cap 340) or to enable an accurate determination of the tax payable by the tax payer.

The commissioner may disallow a claim for a deduction if the taxpayer is unable without reasonable excuse to produce a receipt or other record of the transaction or to produce evidence relating to the circumstances giving rise to the claim for the deduction.

If you do not keep necessary information and you do not have proof, URA may have to determine your income using other methods which may not be to your favour. Good records can prevent problems you may run into if URA audits your income tax returns.

Business records or evidence should be retained for five years after the end of the year of income to which the records or evidence relates. A person who fails to maintain proper records commits an offence and is liable on conviction to a fine or imprisonment.

Adapted from the URA publication 'Business Records' Vol.2 Issue F/Y: 2014/15

To your success!

Lilian Katiso

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"When a man is stung by a bee, he doesn't set off to destroy all beehives"

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