Don’t Wait for URA to Find the Difference
Don’t Wait for URA to Find the Difference
For many businesses, tax compliance is traditionally viewed as a year-end exercise: prepare the accounts, file the tax returns and move on. However, this traditional approach is becoming increasingly difficult to sustain attributed to the increasing use of data analytics, third party information, and targeted compliance reviews, the the Uganda Revenue Authority (URA) is paying closer attention not only to whether returns are filed, but whether the underlying records support the figures declared.
In a public notice first published on 7 September 2026, the Uganda Revenue Authority (URA) outlined its Domestic Taxes Taxpayer Compliance Risk Management Strategy and Compliance Improvement Plan (CIP) for FY 2026/27, identifying 22 risk areas for particular attention. The focus goes beyond simply filing tax returns, with greater emphasis on the quality, consistency and reliability of the financial information supporting the figures declared—a clear wake-up call for businesses to strengthen their tax records and compliance processes.
The problem is that financial and compliance issues rarely start as major problems. They often begin with small things that are left unresolved customer balance that does not reconcile, a supplier statement that does not agree with the ledger, unexplained stock movements, payroll differences, old balances sitting in the books or expenses without adequate supporting documentation.
When discrepancies are identified, businesses may face additional assessments, penalties, interest, management time spent responding to queries, and reputational concerns. In many cases, the cost of correcting weaknesses after an inquiry is significantly higher than investing time in proper record keeping throughout the year.
This is why good bookkeeping is much more than recording transactions and producing financial statements. It is about keeping the business's financial story clear throughout the year. When the books are properly maintained, management can understand what the numbers are saying, identify unusual movements early and, importantly, explain and support those numbers when required.
In summary strong bookkeeping does more than support tax compliance. It improves cash flow management, strengthens decision-making, supports access to financing, and enables business owners to identify emerging risks and opportunities earlier
Stay on top of the basics
(A) Maintain regular reconciliations
(C) Maintain audit-ready records
Businesses that consistently reconcile, review, and validate their records throughout the year are better positioned to withstand scrutiny and respond confidently to any tax inquiry.
The objective should not be to start searching for explanations after a query is raised. The records, reconciliations, and supporting evidence should already be available.
At BDO, our Business Services & Outsourcing (BSO) team works with businesses that need additional capacity or discipline around these areas—from bookkeeping and record keeping to payroll compliance, receivables and payables reconciliations, ledger reviews and financial reporting.
But the bigger message is not about outsourcing. It is about being prepared.
A business that keeps its records up to date, reconciles regularly and deals with discrepancies as they arise is in a much stronger position than one that only starts cleaning up its books when a tax query arrives.
Don't wait for the tax man to find the difference. Find it first.
In a public notice first published on 7 September 2026, the Uganda Revenue Authority (URA) outlined its Domestic Taxes Taxpayer Compliance Risk Management Strategy and Compliance Improvement Plan (CIP) for FY 2026/27, identifying 22 risk areas for particular attention. The focus goes beyond simply filing tax returns, with greater emphasis on the quality, consistency and reliability of the financial information supporting the figures declared—a clear wake-up call for businesses to strengthen their tax records and compliance processes.
The problem is that financial and compliance issues rarely start as major problems. They often begin with small things that are left unresolved customer balance that does not reconcile, a supplier statement that does not agree with the ledger, unexplained stock movements, payroll differences, old balances sitting in the books or expenses without adequate supporting documentation.
When discrepancies are identified, businesses may face additional assessments, penalties, interest, management time spent responding to queries, and reputational concerns. In many cases, the cost of correcting weaknesses after an inquiry is significantly higher than investing time in proper record keeping throughout the year.
This is why good bookkeeping is much more than recording transactions and producing financial statements. It is about keeping the business's financial story clear throughout the year. When the books are properly maintained, management can understand what the numbers are saying, identify unusual movements early and, importantly, explain and support those numbers when required.
In summary strong bookkeeping does more than support tax compliance. It improves cash flow management, strengthens decision-making, supports access to financing, and enables business owners to identify emerging risks and opportunities earlier
Stay on top of the basics
(A) Maintain regular reconciliations
- Customer balances
- Supplier balances
- Bank accounts
- Stock records agree to accounting records
- Payroll records are accurate and PAYE obligations reviewed
(C) Maintain audit-ready records
- Supporting documentation retained and organized
- Tax records reviewed before submitting returns/ responding to URA queries
Businesses that consistently reconcile, review, and validate their records throughout the year are better positioned to withstand scrutiny and respond confidently to any tax inquiry.
The objective should not be to start searching for explanations after a query is raised. The records, reconciliations, and supporting evidence should already be available.
At BDO, our Business Services & Outsourcing (BSO) team works with businesses that need additional capacity or discipline around these areas—from bookkeeping and record keeping to payroll compliance, receivables and payables reconciliations, ledger reviews and financial reporting.
But the bigger message is not about outsourcing. It is about being prepared.
A business that keeps its records up to date, reconciles regularly and deals with discrepancies as they arise is in a much stronger position than one that only starts cleaning up its books when a tax query arrives.
Don't wait for the tax man to find the difference. Find it first.