COVID-19 and Business Recovery

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The Covid-19 pandemic has forced many, if not all business to adopt new formats of carrying out their day to day activities. Working from home has become the new normal, office meetings are held online and e-commerce is booming on 30th April, 2020.

The readiness of your ICT department
“We have always said IT is the backbone for future businesses, here is the future, how are we adjusting?” – Kabiito Karamagi.

Recognizing that many personnel are restricted in movement following the Presidential directives, businesses have been forced to rethink their working arrangements. We currently have more people working from home, and essential workers have been forced to adapt to Flexi-working hours.

What are the benefits? What are the pitfalls of this new normal?
Many have reported success in achieving set targets while working from home, and they have helped their entities stay afloat as the pandemic rages on.

Working from home has tested many organizations’ ICT support and questions on hardware and software to support working from home have been asked. It is difficult to ignore the cost implication of this forced work culture and the challenges it brings to the Human Resources department. Working from home is encumbered by our slow internet speeds, and intermittent electricity supply among other factors.

Another important aspect of your ICT machinery is how effective it can help you collect incomes from prospects. Have you integrated your business to local mobile cash platforms like MTN’s Momo Pay to continue receiving payments on behalf of the business? What are the security implications of using e-transaction wallets and portals to receive payments? These are some of the issues we need to address as we adopt agile business models in the wake of the COVID-19 pandemic.

HR Policies
What happens to the many organizations who cannot provide for employees to work remotely? How do you support staff salaries when your income streams are not pouring in? It is time to focus on how to budget for your human capital. Are you still paying your employees’ full salaries? Have they taken paid leave with full salaries? NSSF has come out to give businesses a cushion by deferring remittances to future dates to help companies maintain liquidity.


Tax Planning
Governments have managed to waive taxes while others have granted tax holidays. Some have given SMEs and businesses money to continue operations. We don’t expect our government to take the same direction but we have a few provisions businesses can harness at the moment. These include:

  1. Embrace the small windows offered by the Uganda Revenue Authority (URA). Organizations whose financial period ended 30 March 2020 have been given until end of May 2020 to …
  2. Enjoy WHT and other refunds, request the Commissioner to apply tax credits to liabilities as per section 113 of the Income Tax Act
  3. File NIL Provisional Income tax returns but ensure to amend them before year-end if there is a need.
  4. Utilise all First Year Allowances (FYAs), Capital Allowances (CAs), Withholding Tax credit, provisional tax payments, any advance payments.
  5.  Entities should apply to be Withholding Tax Exempt. You need to formally write to the Commissioner-General with evidence, for your organization to be considered for WHT.
  6. Explore the objection and appeals process as opposed to “just pay and we get them off our backs”
  7. Seek protection from Section 40 of the Tax Procedure Code Act and Section 67 of the VAT Act for Remission of Tax, with a formal notice to the Commissioner-General. Indicate that you seek to not meet current tax objections due to the pandemic, stating that the business may not be a going concern in the short time.

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