Anti-Tax Avoidance Provisions Under the Income Tax Act Cap 340: A Perspective Analysis

Tax avoidance is a common occurrence around the world and its harmful effect on the tax base of a country are so well known that it is scarcely necessary to stress the importance of removing the loopholes in the tax legislations. The Uganda’s income tax Act inevitably contains both specific and general anti-avoidance provisions. It is worthy of note that the specific anti-tax avoidance provisions do not, nor in the nature of things could they be expected to lay down a series of precise rules for dealing with every kind of problem that may arise in tax avoidance. Modern commerce organizes itself in an infinite variety of ways, and it would be quite impossible within the fairly narrow limits of any section in the Income Tax Act (ITA) to specify an exhaustive set of rules for dealing with every kind of problem that may arise. This partly explains the presence of general anti-tax avoidance rules in the ITA Act. This article essentially analyses the specific sections that are embedded in the ITA which are directly aimed at curbing or reducing tax avoidance. These have been referred to as specific anti-tax avoidance provisions. A small effort has also been directed at the general anti-tax avoidance provisions whose jurisprudence has been somewhat developed by case law.