EDITORIAL: How inclusive are the COVID-19 tax incentives? This and more questions for the finance minister, URA and the MPs

On or around 5^th June 2020 the Minister of Finance Planning and Economic Development tabled in Parliament 4 bills for approval into Acts of Parliament. The above bills are to amend The Income Tax Act (Bill No. 1 dated 4th June 2020), The Excise Duty Act (Bill No.1 dated 4^th June 2020), the Tax Procedures Code Act (Bill No. 9 dated 30^th March 2020) and the Value Added Tax Act (Bill no 14 dated 4^th June 2020).

The bills are ostensibly to address the negative effects of COVID-19 on taxpayers.

Whereas the measures themselves are timely and more than welcome, they follow some public notices issued by URA during the lockdown period which appear to create some contradictions and or need more clarification.

By way of background, the URA issued a public notice on 25th March 2020 and 8^th May 2020 which made the following pronouncements;

• All taxpayers whose VAT, PAYE, Local excise Duty and Withholding tax returns were due by 15^th April and 15^th May 2020  but were unable to file were granted extension up to 31^st May 2020;
• All taxpayers whose accounting date is 31^st October and were unable to file corporation tax returns by 30^th April 2020 were granted extension of time to file by 31st May 2020;

It should be noted that the lockdown was partially lifted on 1^st June 2020 therefore the basis for extension was still in place  by 31^st May, and the URA has not made any pronouncements as to whether the public notices earlier issued have expired and if so when they expired.

The Tax Procedures Code (amendment) bill above mentioned provides that;

1. Persons involved in the business of tourism, manufacturing, horticulture or floriculture with a turnover of less than UGX500 million per year who are liable to pay tax on or after 1^st April 2020 and before 30^th June 2020 shall have their liability to pay tax deferred to 30^th September 2020 with no interest or penalty on the outstanding tax;
2. “a person liable to a tax chargeable on employment income” (This one is grammatically and structurally difficult to comprehend) but seems also to be allowed the tax payment extension till 30^th September 2020;
3. Any interest on arrears that are unpaid by 30^th June 2020 by a taxpayer who voluntarily complies with their tax obligations shall be waived.

My questions in view of the above are as follows;

1. If the URA public notices allowed all taxpayers extension of time to file returns due to the lockdown, what is the intention of singling out the taxpayers specified in above?
2. In respect of the waived interest on arrears, what does the term voluntarily comply mean since by virtue of the existence of arrears there is a presumption of noncompliance?
3. Can you shed more light on (b) above on employment income as it seems to defeat the known rules of grammar?