BY’OTEEKWA

KEY FINANCIALOKUKOLA
MANAGEMENT
OKUWANGAAZA BIZINENSI
SKILLS FOR SMALL YO
BUSINESSES
Vol 1, Issue 2 FY 2020-21 1
What is a small business? Sole proprietor: Certificate
A Small Business Taxpayer for of registration, Statement of
income tax purposes is a resident particulars
taxpayer whose gross turnover
from all businesses owned by Company: TINs of directors,
such a person in a year is above 10 Certificate of Registration or
MILLION shillings but is less than Certificate of Incorporation, and
150 MILLION shillings. The term Company form 7.
TURNOVER refers to one’s total NB. Please note that your company
sales in a year. The legislation is must already be registered by
provided for in Part II Section 4(5) Uganda Registration Services
and the Second Schedule of the Bureau (URSB).
Income Tax Act Cap 340.
Manage your personal and
Note: A person whose total business finances
business income does not exceed Many businesses fail because the
10 million shillings a year does notowners do not take care of their
pay income tax. finances well. The notes below
provide advice on how to effectively
Registration Requirements: to be manage business and personal
registered for taxes you need to finances:
have the following: • Separate your business and
personal expenses.
Individual: National ID or any two • Focus on what you need and
identification documents (Passport, do not spend on things that you
Village Id, Employment Id, Driver’s can do without.
Permit and Bank Statement)

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• Decide what is important, set • Keep a budget and record book
financial goals and raise money of all transactions
to meet them. • Ensure you sell your goods and
• Draw a budget which is within services inclusive of taxes
your income. This is important • Plan ahead and estimate your
because it is easy to get into taxes due at the beginning of
debt but hard to get out the year based on the turnover
• Keep records of all your in the previous year
transactions e.g. receipts for • The tax liability should be paid
purchases, expenses, sales, in full on or before the last day
incomes etc. They must be of the year.
written well to show the date, • Visit your nearest tax office for
items, amount paid/ spent to any questions or assistance
enable you track your incomes
and expenses with an accurate How to Pay Presumptive Tax to
memory. URA
• Save and invest to grow your 1. Go to URA website: ura.go.ug,
earnings. select ‘eServices’ and then select
• Plan appropriately for personal ‘payment registration.’
expenses (e.g. expenditure on 2. Under ‘Tax Head,’ select Income
dependents). Tax – Small Businesses.
• Keep in mind that if you gamble,
3. Insert your TIN and it will auto
you eventually lose.
populate your particulars.
• Write a will to protect
your investments for your 4. Select tax period dates
dependents 5. Fill in required fields under
Business Details and Location
Pay your taxes 6. Input the amount applicable to
Taxes are important for the growth you under ‘Tax Payable’ based on
of the country. Taxes pay for the the brackets above
roads, education, health, and 7. Select the bank you want to make
security of our country. The more this payment
taxes we collect as a country, the
better public goods and services 8. Print out the bank slip and pay.
we will have. It is important to sell
your goods and services inclusive How to Keep Saving
of taxes so that you can remit that It is important to teach yourself the
to the URA. It is also important practice of putting aside part of
to pay your taxes on time. To pay your current earnings for future use.
your taxes, the following tips are Do this continuously by minimizing
important: current luxuries to save for a better
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future. To save better, the following and penalties of not paying
tips are important; back on time
• Determine a goal for saving • Look for the most affordable
• Know that “One by one makes loan offer and plan in advance
a bundle”, even the smallest before taking the loan
saving is worth it • Don’t borrow because others
• Spend less to save more and are borrowing, have a personal
teach your children to do the plan.
same • If you don’t pay back, you might
• Set aside some money for lose your collateral/ security
emergencies and when you use • Beware of aggressive lenders,
it, replace the money read every detail of the loan
• Save for special events, don’t agreement
use business savings for • Think before becoming a
personal activities. guarantor because if the people
• Save with institutions like you are guaranteeing for fail to
banks or a Savings and Credit pay back the loan, you must pay
Cooperatives (SACCO), Village the loan.
Savings and Loans Associations
(VSLA) Make Investments
• Save with low costs and make Put your money to use and allow
gains from your savings e.g. it to grow. You can do this through
through interest property, animals, business and
• Save in a safe, secure and other activities from which you
accessible place can earn profits. Read more about
Shares, bonds, Collective Investment
Manage your Loans Schemes (CISs) and Government
A loan is money that is borrowed securities (treasury bills and bonds)
and must be paid back, usually to know more about the other
with interest and other associated investment options available. This
costs such as loan processing costs, information is provided by the
insurance fees, stamp duty etc. Capital Markets Authority (CMA).
Most people use loans to run their
business and personal project. The You can contact CMA on:
tips below guide you on how to use 8th Floor Jubilee Insurance Centre
loans; Plot 14 Parliament Avenue
P.O.Box 24565, Kampala
• Remember that a loan comes Tel: +256 414 342788/
with a cost and therefore must +256 312264950/1/
be used productively to be able +256 772 589997
to pay it back Fax: +256 414 342803
• Know in advance the effects Website: www.cmauganda.co.ug
4
As you make an investment choice, selling because some
bear in mind the following tips: investments may be difficult to
• Have a goal and an investment sell quickly – or difficult to sell
plan. You can get guidance at all.
from institutions like Uganda • Know the fees you will pay to
Securities Exchange, Uganda make your investment work e.g.
Investment Authority, Private licenses & taxes
Sector Foundation Uganda or
Enterprise Uganda. Insurance will give you
• Bear in mind that every sustainability
investment comes with a risk Insurance is an arrangement in
• Therefore invest according to which an insurance company
how much risk you are willing to compensates you for a specified
take loss caused by e.g. an accident, fire,
• It is important not to put all your injury, illness or death in return for
eggs in one basket. You may an agreed amount of money paid in
diversify your investments in advance (this is called a premium).
different things The insurer must compensate you
• Seek professional advice before for the losses within 60 days after
taking on large investments you have presented all the required
• When you buy, think about documents. You can also get
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information and advice on policies,
licensed insurance companies,
agents and brokers from the
Insurance Regulatory Authority of
Uganda (IRA).

You can contact IRA on:

Plot 5 Kyadondo Road
2nd Floor Block B Legacy Towers
P.O. Box 22855, Kampala
Tel: 0414-346712/
0414-253564/ +256 312 266364
Fax: +256 414 349260
Email: ira@ira.go.ug
Website: www.ira.go.ug

The insurance company

compensates you if you have
undertaken a Life insurance, Health
Insurance, Property Insurance,
Disability Insurance, Travel Insurance
or any other policy in the event the
risk occurs. Before taking insurance,
take note of the following;
Insurance Regulatory Authority
• Find the right policy; get a
of Uganda (IRA).
company that offers you the
exact cover you need and can
Planning For Old Age/Retirement
afford
Be sure to have a sustainable
• Follow the right steps to get the
income source during your old age.
insurance policy
This will save you from working after
• Make a quick and honest claim.
retirement. To avoid this, consider
When you suffer a loss covered
the following tips;
by the insurance policy, inform
• Start planning for your
your insurance company
retirement now
immediately and always tell the
• If you work for the Government,
truth.
you are entitled to a public
• Complain to the insurance
pension
company, if you are treated
• If you work in the private sector,
unfairly. If you don’t get
your contributions to NSSF will
satisfactory redress, approach
be given to you upon
the complaints bureau at the
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 cheques, debit and credit cards,
or bank transfers. Before you
choose your method of payment, it
is important to keep the following
points in mind:
• Understand the costs and
fees involved in the method of
payment
• Keep your personal information
secure
• Know who you are paying i.e. the
correct name, number, payment
detail, date and amount and the
receipt, payment slip etc.
• Keep records to track your
expenses and any money you
may owe.

Credit Management
Debit and credits cards enable you
to buy goods and services without
cash. Debit cards are linked to your
bank account so the money you
• Retire at the age of 55, or get spend is automatically deducted
an accident that stops you from from your account. However, credit
work or get a terminal illness cards are small loans and must
such as acute AIDS or terminal be paid back later. It is important
cancer. to remember the following about
• Ask your employer if s/he has credit:
signed up for a voluntary private • Credit cards must be paid within
pension plan an agreed timeframe specified
• Your family can benefit from by the company (usually one
your pension – if you provide month).
the right information • Credit cards have high penalty
• Use your benefits wisely and interest fees when not paid
on time and should be used
Making Payments with caution
In addition to cash, payments for • Pay your debts on time and
personal and business expenses keep your credit history strong
can be made via mobile phone,
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Choosing a Financial »» Savings and Credit Cooperative
Service Provider (SACCOs)
We all need the least cost and »» Voluntary Savings and Loans
most effective financial services Association (VSLA)
to support the growth of our »» Rotating Savings and Credit
enterprises. The knowledge of Association (ROSCA) (merry-
the services, the cost, the rights go-rounds)
and obligations of financial clients • Be careful when borrowing from
enables people and businesses money lenders, their interest
to make informed decisions. The rates are very high and they are
following tips can safeguard you aggressive
from making poor decisions on • Send and exchange money at
the choice of a financial service registered centres
provider; • When you don’t understand a
• Consider saving and borrowing financial product always ask for
from financial institutions more information. You have the
which are regulated and right to know the product being
supervised by Bank of Uganda offered to you
or Micro Finance Deposit-Taking • Know your financial rights; e.g.
Institutions (MDIs) to be respected, confidentiality,
• Depending on accessibility, access to savings anytime,
you can access loans from a response to complaints,
registered: information on products and
»» Microfinance Institution (MFI) not being forced to borrow.