Employees Can Enjoy Withholding Tax Refunds

In my early twenties when I left the university getting a decent job was not as hard as it is today. Most of my classmates had already signed on jobs even before the date of the last examination. The elders who heard the good news that I had started working for a prestigious international bank came to talk to me out of any temptations of buying a car before building a house. I was convinced after the talks that I would never ever buy a car after-all it was such a very bad thing.

That was not for long though because after drawing inspiration from my sister's husband, by our first graduation anniversary, I was driving a 1990s' blue-black VolksWagen Jetta GTI with the option to open the roof.

Just like my girlfriend's six or so housemates who for long called me Mr. VW without knowing what actually it meant, I must confess that up to now I have also never understood the meaning of the term "GTI" despite posing that my first car was a GTI.

On its way into the country, I got a chance to study the importation documents and something that read "WHT 6%" caught my eye. My clearing agent told me that it was something known as withholding tax which is payable but also claimable. Well I do not think I understood what he meant then.

When I later discovered the finance and tax world I learned that withholding tax is part of income tax but only collected by the revenue authorities in advance on certain transactions. It is a credit available to the taxpayer to be utilised in reducing any income tax liability.

This is not new though, to well established businesses that hire accomplished accountants, tax and legal advisors as these entities claim this tax paid in advance. The group therefore that has kept me awake the last 2 nights or so are the people who pay withholding tax at importation of personal items like cars yet their sole source of income is employment.

Just like myself more than one and a half decades ago when I imported the Jetta-GTI, there are many people especially the employed who pay withholding tax but do not know that they are entitled to a claim and subsequently a cash refund from the URA in this regard.

The good news is that our friends who are in gainful employment, whose employers deduct and declare their right amounts of PAYE (Pay As You Earn) tax should have no difficulty in getting a cash refund of the withholding tax suffered at importation of for example motor vehicles; as long as these individuals have only employment and no other...