Taxpayers Dilemma for Companies operating in Kenya & Uganda | Ronalds LLP

Tax Dilemma for Taxpayers operating in Kenya & Uganda

Coronavirus pandemic has crippled many economies across the globe. This has led into many governments coming up with new regulations and making amendments to the already existing regulations in a bid to cushion the taxpayers and try bringing businesses back to their feet

However, tax has always been dynamic in nature. This has been felt from the eradication of the tradition of all tax systems to the modern systems which are harmonized with the recent trends of business models in the digital era. Also, technology has reduced the miles separating many business entities and converting the whole globe into a small village. As a result, business across different jurisdictions interact more unlike in the past decades.

When it comes to the taxpayers, some of the questions that always linger include, what are the tax obligations that one is bound to encounter upon investing in either of the countries? What are the best tax opportunities available for their business? Some may wonder which is the best approach possible that can be adopted while establishing an entity in either Kenya or Uganda.

However, this advancement in business operations comes along with challenges in matters of tax for the individual taxpayers and the authority. For instance, in terms of authority, how does the government of Kenya respond to the taxpayer operating in both Kenya and Uganda, regardless of their residence, and vice versa for the Ugandan government? What are the best systems that will restrict shifting of profits by taxpayers from Kenya to Uganda and vice versa.

From time to time, tax may pose the need for businesses to change the model of operations that companies adopt in order to minimize on costs and maximize on profits whereas remaining tax compliant in both Kenya and Uganda. As a result, tax remains an important aspect that every taxpayer must understand and plan for in every business activity that he/she may engage in.

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