CPA Derick Nkajja, the Chief Executive Officer of the Institute of Certified Public Accountants of Uganda (ICPAU) has urged the business community to create a distinction between themselves and their businesses.
He said it is important for any business owner or entrepreneur to understand and practise this concept if their businesses are to grow. He was speaking about business formalisation during the Bomba Ya Business Summit at Uganda Revenue Authority Tax Payers’ Appreciation Month exhibition organized at the Independence grounds in Kololo.
CPA Nkajja said many challenges that are crippling the start-ups and fully operational businesses rotate around failure to separate business life from the owners’ personal lives.
“If entrepreneurs appreciate this concept, then they will be able to fully formalize their businesses,” CPA Nkajja said. Failure to put it into practice, CPA Nkajja said that entrepreneurs then would have failed at the initial stage of their business formalization.
He described business formalisation as a driver of economic growth and development through which governments can achieve predictable revenues and the ability to implement sustainable policy direction.
“It would be hard for the government, for example, to assist unregistered maize dealers because of the limited data at its disposal,” CPA Nkajja said. “The only way government can be able to come to the aid of such businesses is if it has enough data to predict how this business would flow,” he added.
In order to kick-start businesses on a better footing, CPA Nkajja urged prospective entrepreneurs to create business names based on their official names as this would allow them leverage on their already existing acquaintances because these would be easy to turn into customers.
He said that formalization would allow one’s business to attract affordable credit and a sustainable customer base as it allows for trust in one’s services.
For a business to grow as planned, he asked prospective entrepreneurs to pre-plan. This process, he said would allow time for the business owner to understand how a particular sector operates in terms of regulation and compliance issues.
CPA Nkajja advised those who are already in business and wish to formalize their operations to conduct a tax health check. This is an important step in business formalization as it would allow the business owner to separate business assets from personal assets. There are instances where business have crumbled after the death of owners. He attributed this to mixing assets of a business and those of the business owner.
He urged them to appreciate and seek services of professional accountants, and in the event of doubt seek guidance from ICPAU, the regulator for professional accountants. He also urged them to report any errant professional accountant to ICPAU for redress.
CPA Nkajja further asked Ugandans to pay their share of taxes as it will allow them to redistribute the tax burden for collective transformation.
The TaxPayers’ Appreciation Month is an annual event organized by the Uganda Revenue Authority. It brings together various organizations from both the public and private sectors. The theme for 2019 is every taxpayer counts.