Provisional Income Tax Explained

Описание: Are you confused about why the Uganda Revenue Authority (URA) requires you to pay income tax before your business year is even finished? In this masterclass from Kisembo Academy, Arnold Kisembo explains the concept of Provisional Income Tax—the mechanism of paying your tax liability in advance based on your own predictions

In this video, you will learn:
The Concept of Advance Tax: Why the government doesn't wait for the year to end before collecting its 30% corporate income tax

Predicting Your Profit: How to use your past performance, projections, and gut feeling to estimate your year-end profit and tax liability

Filing Deadlines:
Non-individuals (Companies): Must declare within the first 6 months of the year of income

Individuals: Must declare within the first 3 months of the year of income

Other Advance Tax Schemes: A look at how this mechanism is similar to PAYE (Pay As You Earn), Withholding Tax, and Advanced Income Tax for commercial vehicles like taxis

Offsetting Your Liability: How your provisional payments become tax credits that are offset against your final income tax return at the end of the 12-month cycle

The 90% Rule & Penalties: Learn about the acceptable 10% margin of error. Discover why providing less than 90% of your final liability leads to penalties for understating provisional tax

Handling Overprovision: What happens if you pay more during the year than your final return requires, and how that balance remains on your ledger as a credit

Understanding chargeable income and the year of income is vital for every "person"—whether an individual, company, or partnership—to stay compliant with the Income Tax Act

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