BBAM 128 ELEMENTS OF TAXATION

Course Level: 1(Semester 11)

Credit Units:  4   Credit hours 60

Brief course description

Elements of Taxation is a course unit that covers a wide range of tax matters from theory to practice. The Course unit is a subject with a distinction of intimate interaction between its theory and practice. The theoretical concepts and policy application in this course unit are interrelated making taxation very interesting but complex as well. The major case study of this course unit is Uganda Revenue Authority (URA), its Statutes, The Income tax Act Cap 340, the Value Added Tax Cap349 and the East African Customs Management Act.

Objectives

1. To equip students with the knowledge and understanding of Taxation in Uganda.

2. To Identify and discuss the major taxes administered in Uganda.

3. To identify the various challenges of Tax Administration in Uganda and remedies for these challenges.

4. To learn and understand the role of URA in the development of Uganda’s Economy.

5. To introduce Taxation as a business concept and how it affects business decisions.

Learning outcomes

By the end of this course students should be able to:

1. Understand different forms of taxation and tax administration in Uganda.

2. Compute different tax liabilities for individuals and corporate bodies.

3. Provide tax planning advice.

4. Demonstrate an understanding of customs management.

5. Adopt best practices when faced with various tax situations and scenarios.

Detailed course description (contents)

Introduction to taxation

1. Theories and principles of taxation (7 hours)

· Basic Concepts and Purpose of Taxation

· Activities of government

· Public Revenue

· The purpose of taxation

· Classification of taxes

· Principles of optimal tax system

· Tax burden and incidence

· Tax evasion and avoidance

Income tax

1. Introduction to income tax  (4 hours)

· Definition of Income tax

· Overview of the Income tax Act, Cap 340

· Imposition of Income tax

· Chargeable income and Gross Income

· Taxable persons

· Year of Income

2. Employment income (4 hours)

· Composition of Chargeable employment income

· Employment income exempt from tax

· Taxable Benefits in Kind

· Deductions allowed against Employment Income

· Taxation of Employment Income - P.A.Y.E System

3. Property income (6 hours)

· Composition of property Income

· Chargeable property Income

· Property Income exempt from tax

· Deductions allowed against property Income

· Exempt property income

· Treatment of property income for tax purposes

· Rental tax

4. Business income (8 hours)

· Sources of Business Income

· Badges of Trade

· Composition of chargeable Business Income

· Deductions allowed against Business Income of a Person

· Capital Deductions

· Exempt business income

· Taxation of partnership profits

· Small business taxpayers

5. Withholding tax (6 hours)

· Withholding of tax by employers

· Withholding tax from professional fees

· International payments

· Withholding tax as final tax

· Payment of tax withheld

· Failure to withhold tax

· Tax credit certificates

· Record of payments and tax withheld

6.  Procedures relating to income tax (6 hours)

· Tax returns

· Tax assessment

· Objections and Appeals

· Collection and recovery of tax

· Provisional tax

· Refund of tax

7. Offences and penalties relating to income tax  (2 hours)

· Interest on unpaid tax

· Offences and penalties due to non-compliance

· Penal tax

Value added tax (VAT)

8. Value added tax (7 hours)

· Introduction and Scope of VAT

· Taxable Persons

· VAT Registration and De-registration

· Taxable supplies

· Place of supply

· Tax point

· Accounting for VAT

· Input and Output VAT

· Calculation of VAT payable / Claimable

· A case of mixed supplies

· Value Added Tax records and accounts

· VAT returns

· Offences and Penalties

· Small VAT tax payers

Introduction to customs management and procedures

9. Introduction to customs management and procedures (3 hours)

· The East African Community Customs Union

· The EAC-Rules of Origin

· Goods Subject to Customs Control

· Benefits of Customs Union

· Challenges of the Customs Union

· Smuggling and its effects

Mode of delivery

Case studies

Group discussions

Lectures

Role plays

Class discussions and presentations

Mode of assessment

Individual assignment 20%

Test 30%

Final exam 50%

References

1. The Government of Uganda: The Income Tax Act, Cap 340, Government of

Uganda

2. The Government of Uganda: Value Added Tax, Cap 349, Government of Uganda.

3. The Government of Uganda: Customs & Excise Act, Cap. 335, Government ofUganda.

4. Bahemuka Pius K. (2012): Income Tax in Uganda, The New Vision Printing &Publishing Company Ltd, Kampala Uganda.3rd Edition.

5. Grupta, Srinivasan (1999), Entrepreneurial Development, Sultan Chand and SonsPublishers. 2nd Edition.

6.  Hisrich, R.D and M.Peters (2002), Entrepreneurship, African edition New Dehli,Tata Mc Graw Hill. 5th Edition.

7. Bahemuka, P. K. (2006) Income Tax in Uganda. 2^nd edition. Kampala Uganda: The New Vision Printing & Publishing Company Ltd.

8. Raquel m, R., and Kimberly. (2005) Internal controls and the state and local tax function, Journal of state taxation vol1