Formalize your business and be at an advantage; URA

The Uganda Revenue Authority (URA) Commissioner General, John Musinguzi has asked businesses in the informal sector to formalise so that they can be supported to grow without facing unnecessary obstacles in their day to day operation.

Musinguzi made the remarks during URA e-bomba ya business summit under the theme: “Business Formalisation and inclusive resource mobilization for Uganda’s economic independence”.

He explained that formalisation is getting one’s business registered, keeping records right and paying the right taxes.

“The principle of taxation is that you pay a fraction of the profits made or income earned. Tax education is a minimum that we must do to reduce informality,” he said.

He said major businesses in the country belong to multinationals because many locally owned businesses fear to be formal.

“You can register and get a Tax Identification Number,online without being asked too many questions. In principle, we are together in this let’s encourage businesses to formalise and support them to grow. They will only contribute tax when they have grown and are making profits. The tax they will contribute will not hurt them but help them to grow,” he said.

The acting executive director, Private Sector Foundation Uganda (PSFU) Francis Kisirinya, said if one is operating formally, then paying taxes shouldn’t be a problem because he or she only pays taxes when he or she has made profits.

“I have seen businesses which operate for years and fail to develop, they eventually fall because they’ve continued to operate informally. When you’re not registered, people cannot trust doing business with you. Everyone thinks that you are the one that deals in counterfeit goods,” said Kisirinya.

He said that for a person running a business informally, he or she might end up paying bills which he or she would not have paid if the business was registered.

Rosemary Mutyabule, the director Business Advisory and Consultancy Services at Enterprise Uganda said citizens hold the obligation to support the informal businesses to grow and then formalize.