Tax And Legal At The Heart Of Business Sustainability

A panic attack swamped my family when I made age 20. The surviving old-folks demanded and pressed for their grandsons from all the young men in my age range. They said they were concerned about the "Karegyesa dynasty" originally from Butare. The folks and their ancestors had predetermined continuity through the boy child. (These beliefs are changing though).

I also know of several powerful kingdoms within the region that have sighed in relief when certain boys were born. These kingdoms' continuity had for decades been perceived to be threatened because they had not yet gotten children meeting certain qualifications

The concern in both was one thing; sustainability. Just like dynasties that have predetermined credentials for assured continuity, there are certain things that must happen in a certain way in order to see business entity sustainability into the future and sometimes into perpetuity

Several scholars on organizational financial sustainability have emphasized certain pillars for business continuity; Strategic Financial Planning, Income Generation, Diversification and Sensible Internal Control. They suggest that if a company focuses and gets those four right then it will be sustainable in the foreseeable future

I seem to agree with the good scholars but not entirely. For taxation to be seated within the Strategic Financial Planning Pillar is to deny it the ever increasing prominence and sensitivity it should exhibit. One of the gravest mistakes that our businesses commit is to regard taxation as one and the same with accounting and finance. Of course this is not true as accounting profits have got to be adjusted to come up to a taxable number. Making these adjustments may not be easy for someone whose focus is the routine work within the finance department

Tax legislation is also so dynamic, for example consistent loss makers may commence paying income tax after a certain number of years according to new proposals. Speaking into the VAT space, there are items that used to be zero rated some years back but are now exempt or taxed at a standard rate. The withholding tax rates are different in different circumstances and in different years. What is allowable to relieve profits from tax is also not static and no longer straight forward; let us look at the regulations coming up in the new financial year relating to borrowing costs where only certain amounts in certain circumstances will be allowable. It is clear somebody has got to keep...